FAR 548 Know Your Why Nots
A lot of talk, several books, and valuable minutes of nearly every self-help seminar conducted in the past 10 years have been devoted to the topic of “Knowing Your Why.” It’s a trend for a good reason. It’s important to know your Why and it’s important to get beyond trivial things like “money” and “the stuff you buy with money.” I value and salute the idea of “knowing your Why.” But today I’m going to balance that with not a competing, but complementary idea. “Know Your Why Nots.”
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News and Resources:
- What do you do with a Zombified Zip code? Number One: Don’t buy and hold there. https://www.attomdata.com/news/market-trends/figuresfriday/top-10-zombified-zips-in-q3-2022/
- Mark Cuban and I agree on at least 2 things. Luca is a great basketball player and buying virtual real estate is breathlessly stupid. https://www.inman.com/2022/08/11/mark-cuban-thinks-metaverse-real-estate-is-the-dumbest-thing-ever/
- As I predicted 3 years ago, the iBuyers will not survive once they are expected to show a profit. I LOVE being right. https://www.inman.com/2022/08/08/opendoor-is-in-62m-worth-of-legal-trouble-the-real-word/
- Time for a panic attack! Home prices are DOWN .77% over the past month. https://www.cnbc.com/2022/08/24/home-prices-fall-for-the-first-time-in-three-years-biggest-drop-since-2011.html
When I say “Why not” I mean it in a couple of different ways. In the first section I’m going to talk about “Why Not” in terms of reasons why you should NOT pursue something. Then in Part Two I’ll talk about “Why Not” in the sense of, well, why not? Why not go ahead with whatever…? These principles can apply to your ideas, your life choices, your career, your education, even your life partner. Bookmark this so you can come back to it when you face a significant decision.
Why Not Part One:
- It doesn’t fit YOU.
- Requires something from you that you don’t have
- Personality type
- Maneuverability (think on your feet, adjust course as you go)
- Detail orientation
- Relational skills
- Requires something you don’t do well
- Skill set
- Requires a life-style you don’t want
- Sedentary vs Active
- Travel vs Stay home
- Early vs late hours
- Tied to a location vs Free to roam
- Requires something from you that you don’t have
- You don’t fully understand it.
- It’s too new (ideas you had in the past 24 hours)
- Risks – How can this come back to kick me in the fanny?
- How realistic the Opportunity is. “If I could just get 1 million people to give me a dollar…”
- Your motivation is suspect
- Fear of loss?
- Limited time opportunity?
- Would your reason for doing this be consistent with your purpose in life?
Why Not, Part Two
- What do you have to lose? No really, think about what you can lose here.
- More than Pros and Cons, weigh the items by their importance and look at the score.
- Is this something you can “dip a toe in” to test? Ease in gradually before going all in?
- Are there multiple unknown outcomes? Could there be several possible results?
- With projects, it’s usually pass or fail, but you don’t know what you don’t know and you don’t know what you might learn that could lead you to the next thing.
- With people there are multiple variables. You don’t know who you don’t know or who you might meet and how that might take you to the next person.
- What happens if I take this to an extreme (unrealistic and sometimes illogical, but sometimes helpful).
- Does this put me in a position to make a positive move or draw closer to one of my ultimate goals?
- If I go for it, how long before I can back away if not working? What’s my commitment?
Starr Has Questions:
- My name is Carlos from Houston, Texas and I want to get into flipping houses and have some questions as to what I need to be able to get started?
- 1) Do I need a DBA to start or LLC to protect myself?
- 2) What type of credit score would I need if any is needed?
- 3) Do I need a Real Estate License to purchase houses in foreclosure?
- 4) Could I get directly with a Broker and pay them a percentage to be able to buy houses?
- Any advice you could give me would be greatly appreciated so I can start my new journey.
Blessing of the Day
“One Half of knowing what you want is knowing what you must give up before you get it.” – Sidney Howard
Expected Air Date: Mon 8/29/2022
[0:00] A lot of talk.
And valuable minutes of nearly every self help seminar conducted in the past,
And it’s important to get beyond trivial things like money and the stuff you can buy with money I value and salute the idea of knowing your why but today on flipping America I’m going to balance that,
With not a competing but a complimentary idea.
[0:58] Wherever you are, whatever your situation, there is an opportunity for you and now, here’s that flipping America guy, Roger.
[1:13] Glad to be talking to you a little bit about real estate and a little bit about mindset today.
On the flipping America show we’re gonna talk about know your why not in just a few minutes but first how to get in touch with us if you wanna follow us on social media and I hope you will,
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[2:19] Where you are and how you listen to the show.
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[2:59] What do you do with the zombie fight zip code? Well, probably I guess we need to answer,
The question what is a zombie fight zip code well the first thing you have to do is identify a zombie house a zombie house,
You know, post dead mutants are living.
It’s a house that’s been foreclosed and is vacant or it might be in pre-foreclosure and vacant if it’s a vacant foreclosure they’re calling it a zombie house and so
What Adam Data does is they look at the zip codes that have the highest number of vacant and abandoned properties and those that have the highest rates they call them zombie fide
It is kind of terrifying when you think about.
[3:44] Percentage of properties,
Anyway it’s pretty high and I’m gonna give you the top 10 zip codes because i wanna answer the question what do you do in a zombie fight zip code well.
Right at the top of the list is you don’t buy any buy and hold properties right there and we just rejected one this week in one of the zip codes and I’ll tell you when we get to it so here they are,
44108 Cleveland Ohio 4412 Cleveland Ohio 44105 Cleveland Ohio 44110 Cleveland Ohio so there’s some Cleveland Ohio and maybe you should.
Just kind of avoid those. If you’re gonna flip there,
Maybe but look at your resales be careful there’s an opportunity because of the high number of vacant foreclosures but there may be a challenge on the selling side to just be careful and then
Next is 61604 which is Peoria Illinois and that’s the where we just rejected the house this week and the reason is we
We had four other houses in Peoria and we had our moving them
So then coming on down the list we have 44109 in Cleveland 44102 in Cleveland and
Then we jump out of Cleveland for a minute too.
[5:06] 13601 in watertown new york then back to Cleveland was 44120 and we wrap up in 13903 Binghamton New York so those are the top 10,
Zombie fight zip codes in the united states and they’re running,
The Cleveland Ohio is running you know 10 to 15%.
And if I own the property there as a rental or if I live there.
Oh Mark Cuban and I agree Mark Cuban if you don’t know he is the owner,
Of the Dallas Mavericks and Anon honestly we don’t agree on some things politically but we agree on at least two things number one Luca is a great basketball player.
[6:04] Including this for today’s show. Buying virtual real estate is breathlessly stupid. I’ve got an article for you in the show notes.
Mark goes on to describe why he thinks it’s a it’s a stupid idea to buy real estate in the and it
You know, he echoes the cinema that I have. Now, I know that some of the
Cyberspace real estate providers and I understand they’re gonna provide this as an FT tokens and that sort of thing and they claim that they’re going to limit the amount of real estate that they produce this way and that will create the scarcity. That’s the problem with the virtual world.
There there the only scarcity that’s there is artificially induced scarcity because you can theoretically,
And there’s no limit and the location is all virtual. So, there’s no such thing as a more optimal location in the Metaverse because
They can all be right next door to each other in the ones that aren’t,
That hasn’t stopped people from investing in virtual real estate and even the projection that it could be a five 1 billion dollars business by 2025.
[7:22] Just crazy,
And when I think of that as being a crazy idea there’s a part of me that says maybe I’m just the old man who wants to yell at the clouds and the kids to stay off the grass i don’t know but hearing somebody is as sharp as Mark Cuban.
[7:38] Echo my thoughts makes me think well maybe I’m not so old and dumb alright okay,
Last item as i predicted 3 years ago the eye buyers are not going to survive once they have to start producing profits.
[8:02] Eyebuyers are really truly making a profit,
You know I I I don’t typically,
Criticize people or even organizations by name
To bring a used car model to the housing industry and i wouldn’t mind the used car model as long as it wasn’t as discon as dishonest as used car salesman but they have to be to make it work
To even get close to something like a profit and they still,
Can’t make a profit.
[8:43] A couple of things about this there’s there is a lot of panic and and the you know the news because they had to report things like this with some exclamation points but first of all.
1 month does not a trend make
This is not an indication of a crash. Now, if it turns out that I’m wrong and the real estate market crashes up. Of course, I’ll be the first to admit it but don’t think that this is going to be a crash,
This is the correction we’ve been talking about and. 77% is less than one% now really,
You can’t measure a trend in real estate in 1 month you need year over year stuff okay.
[9:32] So that does it for the news. Let’s take a quick break and we’re gonna come back and I’m gonna talk about your why nots.
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[10:23] Today the show is about know your why nots when I say why not,
I actually mean it in a couple of different ways. In the first section here, I’m gonna talk about why not in terms of reasons why you should not pursue,
An opportunity or or some business thing that’s been presented to you. Then, in the second part of this, I’m gonna talk about why not in the sense of well.
Why not? Why not go ahead with whatever? What do you have to lose?
These principles i’m about to share can apply to your own ideas, your life choices, your career, your education, even your life partner.
[10:58] It’s although I don’t know you if you should look at someone that you’re thinking about spending the rest of your life with say huh why not.
Probably there needs to be a little bit more of a compelling reason to do so,
Know your why not.
[11:24] Reasons why not.
In the sense that it requires from something from you that you don’t have maybe it requires a personality type that you do not possess maybe it requires a type of maneuver ability that’s not your strong suit,
You know the ability to think on your feet and adjust course as your go or maybe it requires an attention to detail that’s not a part of your natural makeup,
Usually people that are maneuverable and can think on their feet are not the kind of people who are highly detailed oriented
So I’m I’m you know I’m going out there for everybody or maybe it requires relational skills that you don’t possess.
Requiring something you don’t have, it could require something you don’t do well, like a skill set, or like the ability to create ideas, creativity,
Follow through. You know, not everybody I meet is great. It follows through either.
[12:34] Maybe this particular opportunity will require you to be actively involved and you don’t wanna be that active,
Or maybe this this thing will be totally passive and you don’t wanna be passive or maybe this thing will require you to travel and you don’t want travel or maybe it requires you to stay home and you don’t wanna stay home maybe it requires early hours in your related
You know, a night out. Maybe it requires late hours and you’re an early bird.
Maybe it’s tied to a location.
All those things if it if if this opportunity requires a lifestyle that you don’t want then it’s probably not.
The opportunity for you don’t worry.
You just have to keep your eyes open.
Maybe it’s just maybe this opportunity or this idea is too new if it’s an idea you’ve had within the last 24 hours it is too soon to start,
Changing your life to make plans to accommodate this idea.
[13:48] It’s true 99 times out of 100. There’s always an exception. So if it’s too new or,
Perhaps there are risks involved anytime that you’re gonna do something different than what you’re already doing. You need to conduct a risk analysis. Sometimes you have to figure out how to do a risk analysis on whatever this is that you’re talking about. But.
One of the questions that I kind of ask myself what I’m looking at something new is.
[14:19] And once I answer that question I have a pretty good idea of whether or not it’s a fit.
I would otherwise think might be a pretty good idea.
One second of the risk analysis. Okay. And then the third part of this is far as understanding it. How realistic is this opportunity? You know, we just went over 14 1000 members in the flipping America meetup.
And that’s terrific those that’s at the free level
Monetize that with integrity and still provide massive value to all of our people we provide a lot of value for free which is why the group just keeps growing and growing,
Every time we hit some new.
[15:22] Wouldn’t that be something? Yeah, but that’s not really realistic. So, when you’re thinking about an opportunity.
When you’re looking at the projection from someone who’s doing a capital raise they almost all look like check marks you know we’re gonna lose money for 2 months and it’s gonna take off like a rocket ship and.
When you look at those performer projections just remember most of them are not realistic and it’s up to you to determine,
To be realistic if you’re going to consider whether it’s gonna do something and another thing that you may not understand about this opportunity is the implementation if if this is an active strategy that,
They’re gonna be steps involved in a process. Now, I’m not saying that alone is a reason not to do it because the fact is no matter what you do, if you haven’t done it before.
[16:12] You can do all the research you want to but when you get into it you’re gonna learn some things about the way that the best processes and you’re going to improve.
How to go about doing this as time goes by and your skills sharpen and technology improves you’re gonna be changing so don’t worry about nailing it with the implementation to begin with but if you haven’t
Very little idea about the implementation then
You might end up in trouble. Okay, another reason to pass is your motivation is suspected. Boy, when it comes to evaluation evaluating
We often don’t even really our own know our own motives but you can ask yourself these questions.
Am I fearing a loss.
Has somebody created a sense of scarcity? You know, unlimited time opportunity. Am I only interested in this because I’m afraid it’s gonna go away.
Jump at a limited time. Hey, you know what I do some marketing? And I like to create scarcity. It helps to drive sales but i only do that. Hopefully, in an integral way and.
And then, if people think, well, this is not a fit for me and they don’t, they decide not to buy, okay? No harm, no foul.
[17:44] Is this a shortcut,
And is this just a shortcut to get us there I’m not opposed to doing things faster and easier but shortcuts usually wind up,
Not being that effective when it comes to life business and,
Would you reason for doing this or taking this.
[18:27] Okay, those are some reasons why not to do something. Now, let’s switch over to part two real quick. Why not? Why not just go for it?
Well first question to ask here is what do you have to lose no really think about what you can lose here.
Relationships, reputation, those are the four biggies.
Go for it. And then number two, more than the pros and cons list.
After you put the items in the pros and cons I think you should create AA weight and weigh the importance of each item and look at the weighted score of your pros and cons that’s gonna be much better than a straight out list.
Then ask yourself is this something you can dip a toe in to test can you ease in gradually before going all in that’s the kind of opportunity I like
Before I put a one 1 million dollars with someone into the into a project I wanna do a different project with him where I can put in 50 1000.
Or maybe even 10 1000.
[19:38] Yeah so if if it’s possible Dipoto in if you can’t dip itau in then you need a lot of other kinds of proof that this is for real thing.
Are there multiple unknown outcomes could there be pass several possible results.
Hey it might not be you know binary success or failure it could be something in between and what does that look like with projects it’s usually a pasture fail which you don’t know what you don’t know and you don’t know what you might learn that could lead you to the next thing,
With people there are always multiple variables you you don’t know who you don’t know and who you might meet and,
How that might take you to the next person,
If it looks like there are a lot of bad possibilities maybe this is gonna be something that you should pass but if not maybe it’s something you could say well why not.
What happens if i take this to an extreme now this is,
Unrealistic and sometimes your logical but sometimes it’s a helpful thought if you take this idea or opportunity and you take it out to an extreme implementation of it what would that do in your life.
Then ask yourself does this put me in a position to make a positive move or draw closer to one of my ultimate goals.
[21:00] If so.
[21:03] With all those factors considered if you’re not risking a huge amount of time, money, relationship, or reputation.
[21:11] If it has a chance of moving your closer to your goals.
[21:30] How long before i can back away if it’s not working what’s my commitment am I in for a month am I in for a week am I in for a year.
I recently met with a guy who wanted to do some contract work for me,
And he said the contract work it really starts seeing the effects of it after about 5 or 6 months this is not the first time I’ve heard that,
A few people that were doing contract work that I realized after 6 months A one gonna work but I had them under contract for a year,
Well it just makes me a little bit leery.
[22:26] So, there you have it. I’ve I know I’ve kinda blown through this and if you wanna get the outline or you gotta do is drop me a line, send it to you questions of flipping America. Net and say, hey, I want the outline. On the,
I know your why not and we’ll give you the outline.
To summarize let me just remind you if it doesn’t fit it requires something you don’t have something you don’t do well or a lifestyle you don’t want.
If you don’t understand it or if your own motivation is suspect those are reasons not to do it and then,
If you’re thinking about well why not go ahead ask yourself what he had to lose.
Way the pros and cons something you can dip a toe into test are there multiple unknown outcomes what happens if I take this to an extreme.
Does this put me in a position to make a positive move or draw closer one of my ultimate goals and if I go for it.
[23:27] Alright, we’re gonna take a quick break and when we come back, I’ve got a series of questions from a new investor in Houston, Texas and.
Fewer thinking about.
[24:02] Of the year and most of us know the pain and maybe the self-inflicted shame of not reaching those goals.
Sometimes not even getting close sometimes getting busy and simply forgetting about.
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[25:49] Alright. Questions.
Here’s a question my name is Carlos from Houston Texas and i want to get into flipping houses and have some questions as to what i need to be able to get started and I’m just going to read the question and answer,
Do i need a dba to start or lc to protect myself?
[26:23] And you don’t need to even worry about branding yourself right now if you think that you might want it as a brand image when you’re selecting your LLC name I would recommend
Carlos that you look at domain names at the same time to see what’s available you want something close to your brand.
You know, you know, your company name and your.
[26:48] Number two, what type of credit score would I need if any is needed? Credit scores are not,
You know because you won’t be borrowing money from a bank but if you
Are going to do hard money loans then if you have no experience your credit score might be a factor but the standards are substantially lower than the underwriting this involved in,
Purchasing a home to live in because they know it’s a short term loan and they’re they’re protecting themselves and other ways as well.
You know, obviously the higher credit score you have, the better but I think if you have a credit score.
Do number three do i need a real estate license to purchase houses in foreclosure the answer to that is no you don’t need a real estate license to purchase any house
You might want to work with a licensed real estate agent when you’re purchasing
Houses out there on the market but if you’re talking about going to the foreclosure auction I know that you’re in Texas and your auction is held the second the first Tuesday of every month
[28:12] Okay. Alright. Number four,
I advise that you get together with a broker or a real estate agent and you know there is a difference between a real estate agent and a licensed realtor but we don’t have time to go into that right now but get with one of those,
And you don’t have to pay them a percentage. If you are willing to.
Buy through them they’ll get paid a commission based on the sale they’ll get baked commission by the seller and then if you
Buy Susem and list with them they’re gonna like you a lot
Especially if you give them repeat business.
But here’s the advice I give to everyone Carlos get some knowledge.
[29:13] Get a coach or a mentor.
[29:21] I wanna leave you today with a quote from Sydney Howard one half of knowing what you want is knowing what you must give up before you get it.
That’s it for today my friends. Thanks for everything and remember to keep your eyes open.
You’ve been listening to Flipping America real estate investing for everyone. Listen three times a week on stations across the country or on the flipping America.