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A Class (or Blast) From The Past
| | Friday, December 19, 2003 @ 08:00 AM EST
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Contributed by: Ed Meyer
Ed Meyer Properties
Read more archived articles about Squeezing More Profit
What kind of creative real estate was being taught 25 years ago? I had the good fortune of taking a three day seminar from two extremely entertaining and knowledgeable guys. The class was called Fortune Building Fundamentals with the subtitle “Making It Big On Little Deals”. The two guys were Jack Miller and John Schaub, both from Florida. They believed in buying houses, but what they taught had much broader application.
Their investment strategy was based on a “cash harvesting” principle. Their idea was to buy the same number of houses each year for five years. The sixth year you refinance the houses
bought in year one giving you tax free cash to live on. The seventh year you refi the houses bought in year two…and so on.
Most of the techniques they taught were from their own experience or were from people they actually knew. There were colorful names like “The Super Louie” named after a Louie from Arizona who bought up a bunch of houses in his town by creating a second mortgage on a house Louie was buying and using the note to buy a piece of vacant land. He would then use the land as down payment on the house. Another was “The Double Dip Discount”. This is for very financially distressed properties, in particular, when the total encumbrances exceeded the amount discount buyer is willing to pay for the house. Buyer takes house at discount price subject to existing encumbrances and seller issues a note in favor of buyer for the difference between discount price and total encumbrance. So we have house price + new note in favor of buyer = total existing encumbrances on house. These names almost sound like drive-in menu items, don’t they?
There is one activity that separated this seminar from others. One of the exercises was to go out into the local community and actually try to buy a house! The first night you would find For Sale By Owner (FSBO) ads in the paper and then you would call the owner to ask qualifying questions. We worked in teams of four or five. Every FSBO probably got 10 or 15 calls on first night! There was one guy who knew every year when Miller/Schaub was coming to town who put a FSBO ad in the paper just for the occasion! He was always entertained by the seminar students. Appointments were made for the next night.
The second night we were out in the field. We were rolling marbles to check for sloping floors. There was someone assigned to look inside toilet tank lids for the date stamp to determine when the house was built. And, of course, there were offers. The morning of the third day we would tell of our experiences. I took this seminar at least three times (I guess I was a slow learner, however it was also very entertaining) and on one occasion some team claimed to have an accepted offer and proudly showed off the paper-work.
Humor was skillfully inter-woven into the fabric of the seminar. Both could be funny but John was more the straight-man for Jack’s comedic quips. Jack would say, “Never steal in slow motion” or “I’ll even rent to Democrats!” or “If anybody at the bank gets fired, I’ll take credit for it!” About two-thirds of the way through the work-book was a close-up photo of a bald eagle. There was no text on the page, just the picture of the eagle. We had all found it while meandering through the book and we were speculating why it was there. Toward the end of the seminar when discussing managing property we were told to turn to the eagle page and Jack would say, “Now take a good look at this eagle and remember the look”. We were all focused on the stern looking eagle. “This--- is the landlord look!” This brought the house down and when laughter subsided and while we were still focused on the eagle, Jack would say, “I can’t pay the rent until I get paid on Friday”. Looking at the stern eagle brought even stronger laughter.
They also had some advanced seminars. Their special material on options was absolutely superb. I have heard that John is still involved and heard also of some fairly recent event where both were teaching. I’m sure all of you realize there is seminar world beyond Ron Le Grand and Carleton Sheets. John and Jack didn’t have the large infomercial audience, but their product was outstanding and everyone I spoke with felt they got more than their money’s worth. I hope that some of you out there may have had the privilege of learning from these two.
Word Cloud:
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