Waiting for an economy shift before finally making your first investment? Learn why quick decision making is key to success in real estate. Jason Bible and Robert Orfino get straightforward on the reasons why you should take action now so you can reap the rewards sooner. They also walk us through their current endeavors and how they are part of their long-term goal. This episode will inspire you to stop wasting time and decide to move forward.
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Quick Decision Making with Co-Host Robert Orfino
We’re going to get started here. What are we talking about, Jason?
Quick decision making.
I had the best fifteen minutes of radio ever. I’ll give you some of the meat there. It’s not that you don’t know enough, it’s that you don’t try enough and people get stuck in that decision-making process. They’re overwhelmed.
I was listening to some Jim Rohn. Somebody posted in my personal Facebook group and they said, “Jason, I know you have a bunch of books you recommend, but there’s so much content in your personal page, I can’t find it. Can you give me a couple of things because I’m going on vacation next week.” I said sure. I dropped a couple of books in there and then I said, “There’s some Jim Rohn stuff that you need to be watching.” It’s one of these lessons I forget, but it’s the reason why people are not successful in any endeavor. It’s ubiquitous, whatever you decide to do. It’s the whole reaping and sowing. You’ve got this field and this is how most real estate investors do this. They go out and they plant one seed and then they watch the seed. They wait and then nothing happens.
They plant another seed and they wait and they watch and nothing happens. They go to the REIA club meetings for farmers. It’s the farmer investor group. They go to the Ag Council or whatever it is. They go, “My crops are not growing this year. Nothing is happening. I don’t know what’s going on. It’s a terrible market. It’s been too hot. It’s been too cold. It’s been too much rain. There’s not enough rain. The wind is blowing too hard.” The other farmers get around and go, “How many tons of seed did you put out?” “What do you mean tons? I put out two.” “What do you mean you put out two seeds?” “I put out two seeds.” “You’re expecting to grow a crop with two seeds?”
One of the reasons the vast majority of folks are not successful in a lot of endeavors in their life is there’s not enough activity. There’s got to be a ton of activity. In chemistry they have this term called activation energy. For you guys that are in petrochem, you’re going to love this. It takes so much energy to get a reaction going. Like in your car, when you start your car and you start from a stop, that’s when you use most of your energy. You’ve got to get this thing moving, then you add little amounts of fuel to it. You add a little bit more, then it gets going. Many investors, they put one seed down and wait and stare at that one seed. This is how I hear it put another way, “Jason, I only want to invest in properties that need a light rehab that I can get at 70% minus repairs. I’m looking for rent-ready and I want no money out of pocket at a B neighborhood.” I don’t know the asset class types or neighborhoods.
That’s such a cheesy term for single-family. “I want something in my neighborhood as nice as I would live in or nicer and it cashflows.” Let’s take the example of my neighborhood. I live in the cheap seats in my neighborhood and it’s a $400,000 house. There are people that rent houses in my neighborhood. They own them free and clear. They’ve owned it forever. They’ve moved from one neighborhood of the next or whatever, but that’s what I want as a rental property, which will probably rent for $1,800 a month, which makes no sense at all. I want people like my neighbors to rent my property, which at the end of the day they’re tenants anyway, so I don’t know why it matters. I looked at my Bear Creek property and it looks fantastic. I was pretty surprised at how well they kept it.
I totally agree with that and it’s something Jim Rohn talks about. You’re expecting to reap something you’ve never even sown before. You’re not even working. How many offers are you putting on? How many houses have you bought? Have you talked to your banker or your lender? Are you preapprove with Jet Lending? Have you talked to Property Care? Have you even started yet? I’ll never forget, there was this young family when I was over at Right Path and they came to me one day. I was at one of these events. They said, “Jason, we love the show. We love what you and Tom talk about all the time. It’s awesome, but I’m worried about what’s going on in our marketplace.” I said, “What’s the problem?” They said, “We’ve been real estate investors now for six months and we’re not getting anything.” It was a super sweet couple. I said, “What’s the problem?” They said, “We put in seven offers and we hadn’t bought anything yet.” A typical problem with men who are engineers, I like to get them away from their wives and I go, “Did you marry the first one you found?” We’ve got to make a couple offers out there.The Law of Averages is the universal law in everything in life. Click To Tweet
I have seven in by Wednesday, not six months.
“Did you go to grad school or undergrad? How many schools did you apply to? How many schools did you go visit?” They go, “I get it.” This is how this works. You’ve got a garden in the backyard. Do you plant just two seeds or what? It’s the Law of Averages. It’s a universal law in everything in life.
There’s a two hour and twenty-minute video of Jim Rohn here on this summer night in Anaheim, California. That’s a brilliant one. That’s a great one to put on YouTube and then listen to it while you drive.
His voice will drive you crazy if you’re from the south. It drives me insane.
What’s wrong with his voice?
I don’t know. It’s something with the cadence and the up and down stuff.
He’s a little preacher-like.
He could totally have been a pastor. There’s that piece. I totally agree with that.
Why do you say pastor when I said preacher?
You call them pastors in Southern Baptists and Methodists, we call them pastors. I’d have to look that up. That’s a good question. I always think of preachers like one of these tent revivals or Evangelical, people getting healed and all that crazy stuff, getting fat. When I think preacher, I think of getting paid. There’s a guy that I know very well that was there in the Tammy Faye and Jim Bakker days and he shares some stories. I wish I could get them on the radio. I bet he’d do it. We’d have to blacken him out, but they had a money counting room. The money is coming in so fast. That will pull the wool back on your eyes.
I watched a documentary. I think the son had done a documentary and I loved it. All the other stuff aside, I loved the fact that they were building their own Disneyland. That was so amazing. I was like, “Imagine having that much money that you decided you’re going to build a Disneyland. That’s amazing.”
It’s tax–free. I thought about turning our education company into a nonprofit somehow, some religious thing. I’d have to wear a suit up here every day.
You could turn it into a straight education and have 507(c) or something like that. That’s a REIA.
People think that because it’s nonprofit, it’s high-moral.
It’s a total tax scam.
It’s a tax shelter.The only thing you can't get back is time. Click To Tweet
We met the guys who started a couple of these organizations and there is no way are they into this higher purpose of living. It is, “We don’t want to pay taxes and we all want a $150,000 salary a year.” It’s no show salary.
Now, we’re really letting folks in what the real estate industry looks like. I do like that analogy where there’s not enough activity. I’ll tell you the one thing that I listened to Jim Rohn for years, especially when I was starting out. I haven’t told this origin story in a while, but when we first started in real estate, we were sending out postcards. We were sending out these little yellow letters and postcards like a lot of real estate investors do. The first month we set up $5,000 worth, not 5,000 postcards which about 12,000 postcards. I was spending $5,000 a month in marketing for four months and we hadn’t bought a deal. I had a Honda Accord in postcards. It’s $20,000 in postcards.
You’re in a mansion at this point.
I’ll tell the story one day about a $40,000 a month burn rate. I had a Lambo in another company. People were like, “Why don’t you have a big mansion and Lambo?” I’m like, “It’s because it’s that company and that company.” Someday it’s coming. We’re spending all this money on postcards and I was at one of these REIA club meetings and here comes this guy and I’m going to tell you the emotional state I was in, this is completely derogatory, but this will explain to you where I was at. This guy was smart enough to breathe. I’m sitting there and they get him on stage and he had sent out 200 yellow letters, signed a deal and made $100,000. He spent $200 on marketing and made $100,000. This guy was sharp enough to fog a mirror. I’m sitting in the back of the room and my business partner is sitting next to me, we have four degrees between the two of us. We have 40 years of business experience and we haven’t bought our first deal yet. I’m sitting there and I’m like, “Am I not smart enough for this or am I making this too hard? What’s the problem?” That’s when I realized it’s the Law of Averages. It’s this bell-shaped curve. I’m going to talk about the most important thing I learned that year. It was something Jim Rohn says.
I’ll never forget, I’m sitting there in the back of this room. We had spent $20,000 on marketing. Here’s this dude on stage. He made $100,000 when he sent out 200 yellow letters. I’m sitting there, I’m looking at my business partner and I’m like, “What is going on? I don’t understand.” That’s when I started listening to Jim Rohn. He has this bit he calls Until. It’s hilarious. Let me paraphrase it. You’ve got to decide in your life if you want to be successful at this or not, if you want to do it or not. Because at that point, the question is when are you. I get the question all the time, “Jason, when am I going to be successful at this? When am I going to get that?” I always say, “Until.” “Until when?” “Until you get it.” When you have a baby at home and they’re learning to walk, if they fall down two or three times, do you just give up on learning how to walk?” Are you like, “You’re not going to learn to walk. Let’s move on.” How many years do you allow someone to stay in the third grade?
Until they get it.
You’re not like, “You’re not smart enough. You need to stay in third grade forever.” What I find with a lot of real estate investors and to your point for your best fifteen minutes of radio ever is that people are not willing to put in enough action in order to become successful. Some people get it really quickly. Some of you might take two years. Hopefully, you’ll listen to the show and come into our events and stuff. You will shortcut that time and you’ll be able to learn much more quickly. You get around people who are motivating.
This is the reason why we’re not wholesaling. We have a good grasp of what that takes. It’s like, “I’m not doing that.”
I’ve owned that company. I’ll pass.
Why don’t we flip five, ten houses a month? We could be.
I could start that company literally right now, next month we could be flipping ten houses a month. It’s not that hard. It’s a lot of work and I’m not interested, but I’ll tell you what, I sold all that stuff because you look at the tax advantages of it and holding on to stuff long–term and what that means every month, all that work over and over again.
I’m putting those pro formas together at night. We’re consistently at 20% cash on cash plus appreciation plus depreciation. There’s not a big payday and there’s not, “I won the bowling tournament,” check, but it’s wealth. It’s sitting right there. It’s like, “We’re going to do this and it’s 17.6% cash on cash, 24% cash on cash. We’ll take it and appreciation and depreciation.”
That’s the numbers. That’s not what these things are going to be worth five years from now. That’s now. It’s 24% on $1 million, $5 million, $10 million, $15 million or on $14 million, which is what we’ve got right now. I don’t know what it is. I can’t handle the complaining and excuses anymore. I can’t. I’ve gotten so abrasive with folks. They’re like, “There’s this going on and that going on.” I’m like, “Do you want it or not? Do you want to do this or not? There are a thousand other people in here with the same excuse you do and you guys are either going to wash out or you’re going to have a terrible looking portfolio over the next ten years.” I used to tell this story at our weekend events where I would run into a real estate investor and I will see them in one of these events, I guarantee you. I’ll see somebody and it’s so heartbreaking. They’ll say, “I’ve been in real estate for twenty years.” I always want to ask, “What Lambo are you driving? What are you doing here?”
“I have been doing real estate for twenty years.” “Why are you here? It is really hot here. There’s only cheap beer for free? Why are you here?”
That’s the other thing I always love. They’re like, “I’m okay with the Miller Light.” I’m like, “You can start a bar tab as I do. Get whatever you want.” Then I’ll say, “What’s in your portfolio?” They’ll say, “I got one little apartment. I wholesale a deal or two. I flipped once.” You listened to their portfolio and you’re like, “You spent twenty years and your net worth is $2 million? You’re not exactly working this thing.” It’s heartbreaking because the only thing you can’t get back is time. You lose money on a deal, you can lose a business, you go through bankruptcy, you can go through all the worst things in life. As long as you’re alive, you can turn all that back around. Time is the real challenge there. Jim Rohn talks a lot about that. I was reviewing our portfolio and I look at where I started years ago and where I’m at now. What you realize is there was so much and there still is so much activity, so much action.
There was a great post somebody put in the Propelio group and they said, “He who educates the market runs the market.” I thought that was great. I shared it on my personal page and I said, “This is why we’re doing all the Facebook stuff. This is why we’re doing a radio show. This is why we’re starting Mr. Texas Real Estate and a couple of other announcements that we’ve got coming up in the next couple of weeks.” You produce so much action and education is valuable in the marketplace. There’s some currency there and it brings us deals.
More importantly, we are attracting like-minded individuals. There’s not a whole bunch of lease option people banging down our doors to get to our events. I don’t know who is there when someone said to you, “Jason, you sure do a lot of Facebook Lives as you can on there.” I was like, “He doesn’t do enough.” There are 250 people out in this market somewhere, in this country that understand what we’re doing and want to follow along. We’re only charging them $7,500 for a mastermind and the things that we’re going to drop on them is going to be exponentially worth that $7,500 and we want to turn them into millionaires. We have this plan for the next five years and we’re going to keep talking.Understand the difference between running a business and abundance mentality. Click To Tweet
The folks that like what we talk about and see it are going to come and follow us and join us and be moving and shaking along with us. That’s the key for all this stuff. The folks that are with us, they’re going to start taking a ton of action. One of my favorite things in the whole world is whenever we get a new sponsor or partner on the show and they come to one of our events and they’re like, “There’s only fifteen people in here.” I’m like, “You need to go talk to everybody.” There’s no table for me to stand behind. I’m like, “Go talk to those fifteen people.” They’d come back and they go, “They’re all doing deals.” My favorite was our Christmas party. How many people did we have in the Christmas party?
It was about 40.
We had 40 people there and you asked, “How many of you guys have done deals in the last 30 days or something?” Everybody raised their hand.
You can go to room with 200 people and there’d be fewer hands going up.
It was pretty funny. He was like, “This is where the active investors are.” We get back from the break. We’ll talk more about fast decision making. $14.4 million, that’s how much we bought in the last months. We sat down and did the math. These are videos we don’t do. I don’t think we’ve ever done one before. It’s our planning meeting. We don’t share all the assets because some stuff’s under contract. I’m still waiting to hear back from Monday night. They had a conference call to talk about one of the deals that I’m super excited about that I’ve opened my big fat mouth all over Facebook about it. In any case, you have $14.4 million in real estate. I want to buy $25 million, which we should hit. We’ll end up hitting that easily. I can’t remember how many doors we were at in Houston.
Fifty-two in the other market and then 30 something.
We’re at 80 something doors here in Houston. In our other markets, including Houston Airbnb, we were at 70 something, something ridiculous. It’s a lot. We’re under 200 doors and our goal was to buy 100 doors this year and we’ve blown that one out of the water. Buying a lot of real estate, if you want to come along with us, you are welcome to do so. We have a mastermind group at $7,500, four times a year. We get together for a long weekend.
We meet there periodically and then we also do an online call. It’s how we do it. We share all our resources. There’s some stuff we hold back a little bit. There are a lot of people who text me, “Who’s your banker?” I’m like, “I’m not going to give you the one. I don’t you.” Strangers are asking me, “Can I get that contact?” I’m like, “Do you know how long it took me to develop that? I don’t just hand that off because I don’t know you.” It’s weird. I don’t know if it’s a hang-up with me or if I’m doing the prudent thing, but let’s take construction. Remember I told you about Taylor, my greatest landscaper. The audience will know because they hired Taylor at one point. I had Taylor and I would manage Taylor. I would sit down on Monday and say, “Here are the goals for the week. Here are the goals for this day, let’s get at it. Let’s meet again at 1:00 and see where we’re at.” At 1:00 PM she’d be like, “I’m done with everything.” I’m like, “Great, let’s move on to tomorrow stuff.” We get a lot of work done. She was fantastic and she knew the ins and outs so she knew how to manifest what I was describing.
She’s a good implementer.
I’m a good manager and so I’ve had four different people hire her and they’re like, “I don’t know. She’s not getting what I need to get done.” I’m like, “Do you sit down with her every morning and tell her what the plan for the day is? Do you sit down with her on Monday and ask what the plan for the week is?” He’s like, “I do.” I’m like, “Do you stop in the middle of the day and catch up?” He’s like, “No.” I was like, “You’re not managing her.” She could be the best implementer in the world, but if you’re not giving them direction, then they’re waiting.
They are like, “I don’t know what I’m supposed to do next.” I could tell you there are a number of entrepreneurs that I know in this town, they call themselves entrepreneurs where they think, “I can hire some people,” and they go do stuff.
“Rob, I’ll just hire you a VA. They’ll take care of it.” Do you understand how many videos I had to make for the VA and my checklists, all that stuff? You don’t want to hire my VA. You want to buy my direction. That’s what you want. You want to buy my videos and buy my checklist. Forget the VA and people aren’t getting that. I’m reluctant now to refer her to anyone because when I did, people come back to me and it’s like, “That referral didn’t work out.” I’m like, “What are you talking about? She’s fantastic.” It’s like, “I don’t have time. She asked me things.” I’m like, “It’s because you’re not checking in every single morning with her saying, ‘When is my stuff getting done? What time should I call back? You’re not keeping her on track.’” She does a lot of work for clients out there. She’s very successful, but she’s doing stuff for us and for sure I’m checking in every other day, “How’s it going? I saw the progress. Let’s tweak this and this.” “Great.”
I never saw this as much as the last couple of years where somebody gets hired, they’re an all-star employee, they have an amazing background and amazing work ethic. Then they were left to their own devices and then the owner or the manager, I use that term lightly, would come back and scream and yell at them because they didn’t do X, Y and Z. I’m like, “You didn’t tell them to do X, Y and Z.” The employee is like, “If you told me to do X, Y and Z, I’d do it.” You should’ve known. I’m like, “How do they know if you don’t tell?” It’s the most idiotic feedback loop I’ve ever seen. It’s like, have you managed people before? You’ve got to tell them, “These are my expectations. I’m not going to tell you how to do your job, but this is what we’re expecting. These are the results that we want. Here are the reports and all that.” It was turning into this screaming match. I’m like, “This is crazy.”
We have a tech person coming in. Already someone has said, “Is she full–time?” I’m like, “No, she’s not.” “I’ve got about ten to fifteen hours a week for her.” I’m like, “Nope.” It’s the same thing with my glass guy, my banker and my landscaper. It’s, “I want your results, Robert.” “You don’t necessarily want my guy.” “I want your results.” My results are a combination of me managing these people implementing, having other people checking out and then you don’t have that system in place. You think you can get it off the rack and get those results and it doesn’t work that way. It doesn’t work that way with anything.
My favorite is private lenders, “Will you send me a private lender?” I’m like, “No. Call Jet Lending.”Ego is when you need help and don't ask for it, and given advice but you're not humble enough to take it. Click To Tweet
I’m going to tell you, that is the one question that gets me fired up. The last time someone asked me that, I was like, “I’ll give you my pillow and my toothbrush too.” They go, “What are you talking about?” It’s like, “Do you know how long it takes to build a relationship?”
They get a call from some random like, “Who is this dude?” It’s crazy, but there’s a lot of that stuff in this business. Do you know what’s so funny? This business they talk about, I don’t think they understand the difference between running a business and abundance mentality. I hear this all the time. I’ve got a buddy of mine that works for a very large oil and gas concern here in Houston. He works for an oil and gas company that does R&D research and their R&D is stuff they’re going to implement 25 years from now.
Why did you call it a concern?
It’s a business. They’re getting patents and all this crazy stuff. Do you think he has buddies over Chevron calling him and be like, “I heard you got this cool new patent. Can we come over and check it out?” No. It’s crazy. This is proprietary. That was the first time I was ever introduced to flipping houses in snow states where they would change the color based off when the house would be available for sale. If it’s going to be on the market, sometime during the fall and winter, they’re going to do different paint scheme versus if it were spring and summer. I was like, “That’s interesting.” They’d ask, “Jason, do you guys change the colors based on the time of year?”
I’m like, “No, because it’s much miserable here most of the time. We don’t paint them like a humid, swampy color, whatever color that is.” The closer you get to the beach, the more pastels you see. Other than that, it’s pretty much standard California wannabe paint colors here. In any case, we’re talking about making fast decisions and I see so many people like you had said, Robert, where it’s like, “I can’t make a decision. I don’t know. What if this happens?” I thought we were going to war with North Korea. I don’t know what’s going on there. What if we go to war with North Korea? What if we don’t? What if the sun explodes?
I have people talking to me about like world events and I’m like, “For real?”
“What about the trade war?”
“I’m going to wait until that gets settled,” or “I’m going to wait until the next election before I start putting money in the market.” It’s like, “Are you kidding me?”
There are guys who are billionaires with a B and they can’t even predict that stuff. They have literally the smartest people. The University of Chicago has a very famous Quant program there and so is Stanford. They’re literally the smartest people on the planet and they can’t tell you what the result of the trade war is going to be or what’s going to happen in China. It’s mind-boggling to me. I’m like, “Why don’t we make decisions based on the things that are within our span of control?”
The problem is you can keep creating data points to analyze. There are three or four things. If you hit yes on three on four, do it. If you hit yes on three, think a little bit more, but maybe do it. If you hit yes on two, then pass. If you’re only at 50% of your criteria then get out, there is no need to look at it anymore. The other one is the glass half full, half empty. You’ve got that glass of water and real estate investors keep yelling at the water to get more. “Fill up. We want it to be better.” “I keep looking at this deal.” Why? Move on. Let’s go. You can come back in 30 days and make the same low ball offer and if it doesn’t happen, move on.
I keep hearing people about this big thing in California. “I’m looking at this deal.” Thirty days later, they’re back in the room. “How did that deal go?” “We’re still working on it.” What are you doing? Is it a high rise, a parking deck? What are you doing?” “No, it’s a house over here.” I’m like, “What are you going to do?” It’s like, “I’m justifying my existence in this room because I’m on Zillow looking at deals,” versus “I’m talking to an agent making offers. I’m writing up offers. I’m knocking on the door.”
This is where things get interesting because I see all of the real estate gurus out there and all the hate they get, which some of it’s deserved.
They’re an easy target.
I’ve had this one flung at me a couple of times where, “You guys like getting on stage and doing all this stuff because it’s ego.” I’m like, “Everybody’s got an ego,” but here’s where ego hurts you. When you’re the guy or the gal who’s been trying to get into real estate for five, six months, five, six years, you still haven’t bought a deal and you say things like, “I’m still looking at this one deal here.” I’m like, “Why don’t you ask for some help and when you get the advice, you are humble enough to take it?” I see that all the time. You’re not smarter than the marketplace. You’re probably not smarter than your banker, not smarter than your contractor. You’re not smarter than your insurance guy. You’re not going to figure out some trick to get around some title issue when the title company has been doing this for the last 25 years.
You don’t have a trick that adds 8% to the bottom line.
You’re not all of a sudden going to go, “That roof that is $7,000, I can totally get it for $2,500.” What’s fascinating about this business and very few businesses are like this, almost none. Why real estate is so attractive is that all of the variables are given to you. All of them. The only surprise I’ve ever run into in my career is when you’re doing a rehab and it’s typically a light rehab and then you find out, “This entire wall is eaten up with termites.” We could not tell. Even then, those don’t kill you. Sitting there analyzing this stuff, “I don’t know, maybe it’s this deal. What if this happens? I heard there’s a solar flare coming in. A giant EMP is going to destroy everything.” You’re like, “What are you talking about?” I drove through that neighborhood in Bear Creek where we bought that house and I should have done a Facebook Live. The last time I was in that neighborhood was right after Hurricane Harvey. I’ve owned this house for two years. I’ve never even seen it. I’ve seen it once. I’m driving through the neighborhood and I remembered I drove through all of that stuff over there.
The traffic was crazy. That’s why I put that post on Facebook. “Everybody, meet me at the bar because I’m not driving an hour to Sugarland.” Somebody sends me a text like, “I’ll meet you there in 30 minutes.” I’m driving around all in these neighborhoods and I remember it was sheer chaos. There were RVs in the streets because that’s where people were living. There was no grass in the yard. If you’ve never experienced this before, think of it this way. You have locks on the doors of your house to keep people from getting in. You now take all of those contents, including pieces of the house and you put them in the front yard. Your life literally is 180 degrees flipped upside. Everything’s outside. People lost memories. It’s crazy stuff. You’re driving through these neighborhoods and you’re thinking in the back of your mind, “Is this ever going to come back?” I’m driving around, I’m looking at these houses two years later and they’re worth more now than where they before they were flooded. You realize that all those terrible things that, “Is this going to happen?” Time cures all wounds in real estate. You wait it out. That’s all it is. You spend all this time what-if-ing things to death when you just execute and move on.
For us, our world is buy and hold, whether it’s single-family moving this stuff in Airbnb, small apartments and our whole play is appreciation. We have $14 million on the board that someday will be worth $30 million in seven, eight to ten years. That’s our play. The fact that we’re cashflowing well with an Airbnb or $200 a door on our apartments is gravy. The fact that we’re going to create another $15 million in wealth over the next seven years is the play. If you bought it and you’ve got a little extra rehab or you bought it a little too expensive, the play is still appreciation. Don’t be afraid of these things. You’ve got to make these offers. You’ve got to get out there and do it.
If they want to get in touch with you, it’s (281) 401-9008.