In today’s episode Mike Ayala starts off a mini-series on how to get started in real estate. What differentiates him from the others is execution. Mike Ayala figured out what he wanted, why he wanted it, and what he was going to do to get it. Over the next few weeks, Mike Ayala will share some of the deals he has done and how he was able to accomplish these deals with no money down.
Mike Ayala explains the misconceptions that surround getting started in real estate. In this episode, you will start setting your mindset to investing and the win-win situations that you can be a part of. Mike also offers you the opportunity to enter into a book giveaway!
“You can have everything you want in your life if you just help enough other people get what they want.
- [0:01] Show Introduction
- [0:32] Start of the Podcast
- [1:10] Drive, Desire, and Execution
- [2:06] Mini-Series to Get Started in Real Estate
- [2:47] How to Get Started
- [3:01] Finding the Right Mindset
- [4:34] Finding the Win-Win
- [6:05] Death, Divorce, and Don’t Want Them
- [8:40] Change Your Mindset
- [9:56] Go Giver Giveaway
- [10:27] Benefits of Helping Others Get What They Want
- [11:40] Find the Deal and Execute the Plan
- [11:48] Closing Thoughts
- [13:02] Outro
Four Peaks Partners | Website
[https://www.fourpeakspartners.com/] Facebook Group | Investing for Freedom
[https://www.facebook.com/pages/category/Editorial-Opinion/Investing-for-Freedom-471491206961417/] Stephen Covey | The 7 Habits of Highly Effective People
[https://www.amazon.com/Habits-Highly-Effective-People-Powerful/dp/0743269519] Bob Burg | The Go-Giver
The first 3 people to contact us with the subject line “Go-Giver” will receive a free book from Mike!
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Are you looking for freedom, freedom from the daily grind and hustle, or just finding a way to live the life you always wanted? Then join us on the investing for freedom podcast. Our host Mike Ayala will help you discover new ways to find freedom. With tips, insights, and interviews you’ll learn the exact systems he’s used to travel the world and live his best life. True success and happiness are all about freedom. And here’s your roadmap on how to find freedom on your own terms. Welcome to the investing for freedom podcast. Here’s your host, Mike Ayala.
Thank you for joining me on the investing for freedom podcast. Today I’m going to talk to you about getting started in real estate. And for those of you that are listening that are already advanced real estate investors, don’t turn off the podcast. Cause there might be some tips or tricks or something that you learn here. And if nothing else, maybe you could share this episode and the few that are going to follow with somebody that you know, cause you’re going to get asked a lot, even as an advanced real estate investor, Hey, how do I get started? What if I have no money? This might answer some of those questions and you can just steal what I say in my content and repackage it and use it yourself.
Anyway, so I really want to say that I’m like really smart or special or something like that. But you know, really the only thing that differentiates me and everybody else who is a successful real estate investor or business owner or anything else is just execution. And you’ve probably seen this if you follow me at all, but one of my mentors always said, get off you can do what you can and can the rest, which doesn’t sound like mind-blowing information or, some amazing quote or anything else, but that sums up success. Get off you can, mean, just get up, go do something, do what you can and can the rest, there’s certain things you can’t control. Like COVID-19, just figure it out. So anyway, I really want to say that I’m like really smart or special, but the reality is I’m not. I just had drive and desire and even with the investing for freedom formula, I figured out what I really wanted, why I wanted it, what I’m going to do to get it, measure results and adjust. It’s that simple. Over the course of probably the next four or five weeks I’m going to share, week by week, I’m going to share just some deals that I’ve done, how I got into deals early on with no money down. And actually some of them are over a million-dollar deals with no money down. My very first mobile home park, which, you know, now we on 39 with partners, my very first mobile home park was a no money down deal. And even though the original seller wanted money down, I figured out how to leverage it and borrow money too. Get the entire deal done with no money down.
So over the course of the next few weeks stay tuned on Mondays, the little short episodes, cause I’m going to go through deal by deal how we did probably our first
five or six deals. But here’s what I’ll say about getting started in real estate. You don’t need a million dollars and you don’t even need an 800-credit score. When I look back to, getting our first deals done, it’s always about value proposition. It’s always about opportunity.
The first thing, Kara and I set our mind to was that we wanted to invest in real estate. And the question is why, and for us it was cashflow. It’s always been about cashflow. As we became a little bit more sophisticated and got a little further into it. I began to understand the benefits of tax benefits and the other reasons to invest in real estate leverage a lot of reasons. But originally for us, it was cashflow. We looked forward, we were young business owners and our business was growing, but I looked forward know to the age of 60 or 40 years and I realized that, well, at least I thought as a young business owner, I probably was going to be still working in that business and didn’t want to get to 65 years old and not have some, amazing retirement account. And so real estate investing was a way for us to retire at some future point. So step one was getting our mind right around it and just determining what we really wanted, why we wanted it. And I talk a lot about the reticular activator. One of my mentors, Dan Sullivan always says the eyes only see, and the ears only hear what the brain is looking for. So we started looking for cashflow. We started looking for opportunities and I won’t go into the details on these deals. But in the first two years we found two very low or no money down deals. One of them, while they were actually both money down, but very small. I think one was $5,000 down and one was $7,000 down. And then the next year was the big win. And I’m going to, again, analyze those deals, but we’ll talk about those in future episodes. Take you through the, exactly how we did it.
So there’s a couple of things that I want to say though, getting into having your mind think about this. So Franklin Covey had a concept in seven habits of highly effective people, and it was thinking win-win. And a lot of times we think something is win, win, win, it’s really win, lose. We’re constantly negotiating across the table and we’re looking for a win lose. We want to win. We want them to lose, well, that’s not truly win-win. So the first thing that I would say is if you’re looking to do real estate and you don’t have a lot of money, or you don’t have a lot of credit, or you didn’t have a lot of experience, cause even banks will lend on real estate. But a lot of times, depending on the asset class, they may not want to loan to a newbie investor, or it may be a lower LTV because of the risk factor. And so when you think win-win sometimes the best way to do is to sit there with the seller. What’s the seller really wanting and what are the opportunities for both sides? Because there’s obviously opportunities for you, as the buyer, if you’re thinking about cashflow or tax benefits or whatever else, but why would that seller want to
sell that property? And the problem is that a lot of times we’re looking at properties that are not win-win. The seller wants to sell at the highest price possible and it makes it really hard for that property to cashflow. Now, if you’re looking for tax benefits, it may not matter. If you’re purely looking for tax benefits. I don’t know why you would invest only for tax benefits. I guess there are actually several reasons, but it’s not common.
So what are the opportunities for both sides? And typically, one of my mentors, the same guy that says get off your can do what you can, and can the rest always talked about the three DS, death divorce, and don’t want them. And again, this doesn’t sound like some polished advice, but I’ve lived so many deals and so much of my life based on this guys, simple, those little bombs of wisdom. Death, divorce, and don’t want them. And in future episodes, as we unpackage and analyze, some of the really amazing deals and opportunities that have fallen in my lap that were no money down or low money down back in the day, a lot of these came, they all fell into one of those categories, death, divorce, or don’t want
them. And a lot of times we think we’re taking advantage of somebody, okay, mom and dad died. And you know, a lot of people would say that you’re an opportunist or taking advantage. But a lot of times those kids don’t want that property. They don’t know what to do with it. They don’t know how to manage it like mom and dad did. So not only is that a death situation, it’s a don’t want them situation. They don’t want it for some reason, they want the cash, they want to get out. And so it’s not us being predatory or opportunistic. It is truly a win, win. It’s an opportunity for both sides. And so there’s a common theme or a common denominator in every good deal and that’s win, win. What is the opportunity for me as the buyer? What is the opportunity for them as the seller, in the case of a death, the kids didn’t want it because they don’t know how to operate it, where they have their careers in their life, or they live in a different community, or they don’t know anything about mobile home parks or whatever the story is, they don’t want it. And so the opportunity for them is they get cash and they get away from the deal that is really a burden to them. Maybe it was mom and dad’s pride and joy, but now it’s a burden to the kids. And the opportunity for us is we get the cashflow, we get to operate.
So if you’re thinking win, lose, that’s the wrong way of thinking. If you’re buying at the top of the market and there’s not an opportunity for you, that’s a problem. But the time when you’re going to find deals is one of those things, death, divorce, and don’t want them, why divorce? Well, again, you’re being predatory. You’re taking advantage. No! When people get a divorce, maybe they’ve built a portfolio together and now they need to figure out how to split that, they don’t want to operate that together as a couple anymore. And so they need to figure out how to exit that. And
so literally we did a multimillion-dollar deal with a divorced couple, they were divorcing, and they needed to split things apart. A lot of times when we’re in the death divorce or don’t want them scenario, that’s where in lies the opportunity because they need out of it. And if we get them out of it, that’s a win for them. We want the property for whatever reason, cashflow, leverage, tax benefit, whatever it is, that’s the win-win.
So I would love to say that I’m like the smartest guy in the room, but as you’ve heard me probably say, one of my mentors says, if you’re the smartest guy in the room, you need to find a bigger room. It’s not really about that. It’s about relationship. It’s about opportunity. It’s about thinking win-win. So I would just encourage you guys to change your mindset. There’s not a really, a whole lot of direct action from this podcast, other than just start thinking different, start beginning to see the opportunity. So if you’re looking to, how do I find somebody to take advantage of, to get them out of a deal or this that’s not a win, win, but if somebody don’t doesn’t want them, they are in that don’t want them category, that’s a win, win. And so how do you find those? Well, the eyes only see in the ears only hear what the brain is looking for. So you’ve got to shift your mindset and I promise you that the universe will line up. People will line up and as you begin talking or sharing things that you want to do, not only the universe, but people will begin going to work on your behalf. When somebody hears what you’re going after, or you start asking for the sale or whatever for the property, people are going to start looking for that. They might not have exactly what you need, but then when somebody, maybe their uncle it’s like, Oh, I really need to get rid of this property. And maybe they’re not the buyer, but now they connect you. That’s how the universe works. And there’s an amazing book called the go giver. Go get that book and take a listen to it. In fact, the first three people that email me, just put, just email firstname.lastname@example.org and put Go-Giver in the subject line. Send me your address and I’ll mail you Go-Giver, the first three people that email me, amazing book. But that’s all around this world is just like getting your mind changed and looking at opportunity and thinking win-win and connecting people and deals and opportunities. When you start thinking along those lines, it’ll change everything. Zig Ziglar said, you can have everything you want in life if you just help enough other people get what they want.
And so it really begins with mindset change. And again, I’m not giving you anything really actionable other than to start thinking about this, tune in on the following Mondays. And we’ll start talking about how I did deals, which might trigger some things in your mind, and I’ll give you some tools along the way. We’re always looking for the tools, right? I’m telling you deal analysis is not that
difficult. In fact, a lot of times we overcomplicate it and the bigger the business gets and the more checks and balances we have to put in place, the more difficult it gets. Literally we used to do deals on the literally the back of napkins. It all comes down to cash flow. And there’s very few again, when you have to scale, I get it. We’ve got processes in place and sometimes our spreadsheets are 32 tabs long and it’s just, it gets crazy. The reality is what’s the win, win in the deal? What are market rents? What are the expenses? Can we raise market rents? What do we see the market doing? In the near term, in the long term, can we lower expenses? What’s the current NOI? By raising rents can we get the NOI up? By decreasing expenses can we get the NOI up? It’s that simple. And then there’s some, tax conversations in the middle of all that. But really real estate investing isn’t that difficult. The hardest part about real estate investing, there’s two parts; finding the deal and then executing on the plan.
So all that being said I’d really love to say I’m the smartest guy or I’m special or whatever, but no, I just really started changing my focus. And like Tony Robbins says where focus goes, energy flows. There’s nothing really that special about it. Kara and I just decided we wanted two income producing properties a year for 10 years. Part of our retirement plan. We got two done in the first year. And then all of a sudden in the second year of 72 space, mobile home park falls in our lap. And so now, we’re basically at 74 tenants potentially, that’s year two. So we’re like three X star plan at that point in time, our 10-year plan was three X in year one, and then you go forward and we ended up with 45 single families and commercial buildings and mobile home parks. And then I teamed up with my partner, Andrew, and now we have 39 mobile home park communities with investors. Why? Because my focus changed and where focus goes, energy flows. My reticular activator started looking for opportunity. And when it starts looking for opportunity, opportunity will find you. So the point of all this, I’m nothing special. Just change your thinking. Stay tuned in the future because we are going to dig into this a little bit more and have some amazing conversations around how we did deals. So I hope that helps and have a great day.
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