What You Missed February 2015 General Meeting
by Rob Earhart
Wealthy or Broke: The Choice is yours!
Presented by: Jimmy Napier
February 3, 2015
“There’s the right way and the wrong way, and I’m mostly right,” exclaimed Jimmy. I had a granddaughter that worked as a waitress making $15 to $25 per week. I asked her, “How long are you going to put up with that?” She asked, “What can I do?” Jimmy told her to go back to school.
I was in rehab for 3 weeks and ran into an Uncle. I talked to him for half an hour and he looked like he did not know me. Then he said, “You don’t know what you have to go through to get out of this world.”
I had a bad accident and the other car had $15,000 in liability insurance. The fastest way to go broke is not to have insurance on your automobile. They carried me to the trauma center via helicopter. The ride took 8 minutes and cost $36,000. From 11 o’clock to 5:30 the next morning in the hospital, my bill came to $100,000. What do you think it would have been if there were three others in the car? A half million dollar night?
I used to belong to a club where each person had lost over $100,000 on one deal. Not many are trying to get into that club.
Things are really changing up where I live, especially in the funeral home industry. They used to take the dead and clean them out and set them up in the homes. People asked, “Don’t he look natural?” ” I thought they just looked dead.” Then we got away from that and we started to go to the funeral home to see the dead people. Now they have the funerals during the day and now just let you visit for an hour or so.
Now something new is coming about in our area. Now people are donating their bodies to science. One fellow donated his wife’s body, then he passed and his body was donated also. “Now it’s back to normal: when you’re dead, you’re dead.”
My granddaughter attended an all-day class and got a certificate in phlebotomy. Now she can get an extra $5 per hour. That’s $10k per year for a $400 class. Is that a good deal? “How did you arrive at that deduction?” “What is the capitalization rate on the $400?” asked Jimmy.
Have you thought about our creating a generation, most of whom can’t do anything for themselves? The one thing I decided was that most of my career I had to do it myself. I spent many an hour painting. “You are never worth more than what you can be replaced for.” I decided years ago that if anyone charged me more than $25 per hour, I needed to study on that. I took classes at the local tech school. I learned how things worked and there were so many benefits, I started to teach there.
Capitalization rates are how you determine what to buy. If you use the cap rate on everything you do, you will make a lot more money. Any product that I can buy that I can increase the value of, I will buy. I will buy anything that I can force appreciation on.
I bought a furniture truck but did not need the box on the back. Now it has a bedroom, kitchen and bath and is a studio rental. I found someone getting a divorce that it worked out great for since his divorce is not final. Now it’s rented for $350 a month and the property appraiser sees it and it looks like a truck body so my taxes did not go up.
I bought farms and put mark-up on them. I bought ones on a fork in the road and the property on the road is more expensive than the other. We sold off the lots along the road and it paid for the other plots of land.
Remember to always include this phrase in your contracts: “Any monies paid for releases will be applied to the next regularly-scheduled payment.” If I bought a farm of 40 acres for $40k and sold off 5 acres, I would pay off $5000 and the balance is now $35,000.
“What if you bought a duplex and sold one side as a townhouse?” he asked. “You would apply it to the mortgage and would not have to make any payments for years.”
Now is the best time to refinance for the next 30 years. Most people try to get the prices down when they should work to get the terms better.
Donnie came to me with a 5-acre lot with trailers on it. I put up the cash and he did the work to fix up the park and rent the trailers. After I got my money we split it 50/50. I still get checks on that deal even after 15 years.
“Whatever you do make sure to get residual money for years,” advised Jimmy.
If you are ever going to speculate on properties make sure you use an option. If you option it for two years you can collect on it for two years and you don’t have the liability of having to close on it unless it’s still a good deal.
“I don’t have to go to work tomorrow... I have an opportunity to work,” exclaimed Jimmy. “It’s my choice.”
What kind of asset do you like? I like a 3 bedroom, 2 bath, full brick, so I don’t have to paint. It opens the field up for families with kids who are real stable and pay their bills.
He talked about “walking the mortgage” and how it would benefit you by releasing the property so you can reap the rewards and collect the check.
Jimmy gave out his phone number and said, “if you got this you can call me and I will talk to you about how to do it and help you through it.
“I can help any one of you if you will just study,” advised Jimmy, “but If you won’t study, I can’t help you.”
What’s the best and most profitable way to make money? I made a bunch of money with my little book. There’s a lot more money talking about this stuff than doing it. The best thing I ever did was write that book Invest In Debt. I buy them for $1.50 and sell them for $20. If you have a book in you, don’t die with it in you.
“If you don’t like where you are, remember you made the choice to be where you are. If you want to change where you are, make different choices,” was the parting thought of Mr. Napier.