What You Missed June 2013 General Meeting
by Rob Earhart
Presented by: Jimmy Napier
June 4, 2013
In 2001, John Schaub, Jack Miller, Pete Fortunato and I met in Las Vegas. We recorded the meeting and it was the only recording of Jack around. I came home and decided to retire, since I was at my peak, and at 65, I decided to retire. I’m afraid it was too early.
I’m 75 now and decided to step back into it. We came through a period of time when we had the best instruction. When you get to be my age, there are not a lot of people you can talk to: they are all dead.
I reached a point that I could not sleep so I went to the doctor and he said I should go to a lady doctor in Panama City. I told him “there weren’t any good lady doctors.” But now there are lady doctors, lawyers, judges, etc. and they are very good.
They checked me for Alzheimer’s or a brain tumor. They knew I wasn’t quite right. The diagnosis was that I had a vitamin B-12 deficiency. I got a shot of B-12 and started to get better. I then wanted to take more to boost my energy, and it just got better.
At 41, I came home from a class in Tampa and had a massive heart attack. I had to have one more smoke before I went into the hospital, since they won’t let me smoke in there. My wife took me to the hospital and I was getting better, and my doctor showed me someone who was dying of smoking and I decided to quit.
Then while watching TV, I decided that I must have low Testosterone, low T. I went to the doctor and he explained that that might cause low energy and low libido. I told him, ”I’ve had that all my life”.
What I learned in the 80’s was that, whatever you do today, it should give you some benefit in the future. It was about the same as it is today. At that time, there was 18% financing, low real estate sales, etc.
I wrote my book in 1982 and, at a meeting, a lady said she didn’t see it on the New York Times Best Seller List. I told her that it was the best seller I had and I sell it nationally, so it is a “National Best Seller.”
You have to learn to be a good negotiator. On a balloon note, you want to renegotiate first, then find out if they have some other money to lend, and direct them towards other people.
If you depend on banks, you will get cut off at 5 or ten loans. Where is the money to be made? In financing. That’s where the money is.
Learning what not to do is as important as learning what to do. You have to get your income up. You can’t make payments unless you have the income to cover it.
If you borrowed money from me at 18% for 20 years, interest only, then I would just give you the principle in 20 years, because the interest is more valuable than the principle.
My parents owned 20 small homes in Tallahassee which gave them enough money to live well. My sister worked for the telephone company and her retirement was less than the income from two of those rental homes.
“In God we trust, but everyone else must provide collateral.” Whatever I invest in must have some form of collateral. I prefer 3 bedroom, 2 bath, raised up homes.
How about tax certificates? There are a lot of people bidding on them and bidding them down.
You are not going to get a good deal until they like you. You have to look just like the one you are negotiating with. You can’t have orange hair if they don’t. Always stay at or below the level of intelligence of your other party. Never act as if you are smarter than they are.
If there is any math, let them do the math so they know its right. “Always listen, ’cause you can’t learn if you continue to talk”.
10% of everything you make should go to Capital so you can buy something when a good deal comes along. Another 10% goes towards anything that makes you feel good about yourself.
Getting people to explain things to me will pay off much more than talking to them.
Since the tax laws changed in the 80’s, we went to 27.5 years depreciation, and I discovered I didn’t have enough income to cover the depreciation. I started to do some mobile homes.
“Anything that really bothers you, get rid of it.”
Buy everything in a land trust, put the beneficial interest in a family trust.
If you have a property with a low mortgage, pay it off. If things get bad the banks will go after the properties with the most equity.
When I am in negotiation, I always stay quiet for at least ten seconds after they answer. They may start talking again.
When sellers carry back but want a balloon because they want to get the money before they die, you can ask them, “You want to leave some money for your kids, don’t you?”
If you have trouble collecting your rents, get someone whose income depends on them collecting that money. They will do it more easily than you.
70% of everything you make, just spend and enjoy it. Put 10% into Capital. Put 10% into high-quality education. Put the other 10% into something that brings you pleasure.
“All the best in your investing.”