What You Missed December 2016 General Meeting
by Rob Earhart
From $50K to $50 Million
December 6, 2016
Frank came in from Del Ray, Florida, about three hours away. “I grew up in Carmel, Indiana in a family of six. I went to four schools that did not like me, so my family sent me to Colorado; then I went back to Indiana and ended up with a few stints in juvenile hall.
“I decided that I had enough and wanted to erase what had happened but I could not do it in Indiana, so I took a plane to Florida,” explained Frank. I ended up in Palm Beach, watching people who lived like I wanted to, working at a golf course, watching the rich and famous, then going home and watching the television show Rich and Famous with Robin Leach. “I was surrounded by the people living my life,” he proclaimed.
At $4.25 per hour, I was not going to get rich, but I did know how to hit a tennis ball. Finding out that the same people who played golf all day played tennis at night, I then took a course and became a certified tennis pro. So, I quit my job and went to find a tennis court.
I talked to builders of the most affluent communities and told them I would be their pro. I had to call my mother to find out my whole name: Francis McKinney, III. Since I could, I made myself the head tennis pro and went from $4 per hour to $50 per hour, cash money. Soon I was making over $100,000 per year.
Frank claimed, “I earned my Ph.D. in real estate and finance on that tennis court. The people I was teaching tennis to were teaching me their secrets.” I reasoned that if I wanted to ask questions, I would run them hard for 45 minutes so I could talk to them one-on-one while they were catching their breath. One client, Steve, told me he won a lawsuit at my age and bought a duplex. He continued, “it paid me $300 per month and did not seem like much, but I now have 50,000 units bringing me $600 per month.” That is $30 million per month as his current income.
Many others had similar stories; all were making their money in real estate. I asked a few people to invest in me and found some who would. I raised $100,000 and bought my first house. I paid $35,000 for that house, spent $7,000 on the fixup, and sold it for $50,000 and made $7,000. Then I did a lot of them, all under $100,000 and we made some great money.
Then one day we saw a house on the ocean that had two months of grass grown over and was a foreclosure. It was $750,000, so we sold everything and bought it. We put another $750k into it but it took another year to sell. “I learned on that sale not to try to wring out the last nickel. I could have sold it nine months earlier if I had accepted a decent offer.”
In the entrance of every house I sell, there is a filled-in contract by the front door, everything except the price. You must heighten each of the five senses and, once you move them from need to desire, you will sell the house.
You need to doll up the kitchen, master bedroom and bath for the wife, but you need to provide a room for him. A media room or a den that exudes masculinity will bring the spouse into the sale.
In our houses, we fully furnish them: furniture, appliances and even toothbrushes, linens and towels. “At a certain level the wealthy can control everything except time. You want them to feel at home immediately and, once they do, they buy.”
You need to have passion in your sale; if you cannot, then hire a broker to sell your properties.
My people are willing to pay $3,000 per square foot for 3,000 square foot condos. We are now building 4,087 sq. ft. “micro mansions” with all the upscale furnishings and asking $3.9 million for our prototype. I was offered $3.5 million, but refused because I wanted to learn from this one.
Frank emphasized, “the most important thing in real estate is marketing. You must concentrate on the selling of your properties to be successful.”
To keep on the edge, I ran the Badwater Ultra Marathon through Death Valley for 135 miles. No thought that I could do it but now have run it 10 times and finished 6 times.
The human species is not geared up to stay motivated. Don’t beat yourself up about not being motivated. Inspiration stays a little longer, so you cannot stay inspired. Aspiration is the key, it can alter your DNA, changing your life.
Whom do you aspire to emulate?
Whose personality do you aspire to sample?
Whose footsteps do you aspire to walk in?
What legacy do you aspire to leave behind?
You don’t have to aspire to a real person. You can choose Robin Hood or Willy Wonka.
Never lose the little girl or little boy inside, just decide whom you would aspire to be like, that can get you motivated and inspired. Once you put those out there, you will change your life.
The Risk Continuum: Phobic is equal to 1 and Daredevil is equal to 10. Where do you fall? You must get over the fear and take some risks to become successful. Fear and risk are always associated with big change, big challenge.
Once you have done that, you must execute. Relentlessly pursue your aspirations, pull the trigger and close the loop.
You are not a real estate investor, a contractor, etc.; you are a real estate opportunist.
What about your spiritual highest calling? When I sold the most expensive house in Palm Beach, I was missing something. I started to volunteer at a soup kitchen to help those who had taken a different turn in their lives than I did.
“To those to whom much is entrusted, much is expected” (Luke 12:48). We have built 20 villages in Haiti where the people are living on the streets. We can build a block house for $4,000 and the entire village with community center and church for $300,000. We are raising money to help pay for damages done by the hurricanes. Over 20 percent of the houses we built were damaged in some way or another.
Frank opened the floor to questions.
Someone asked if you use other architects? “I do the design work and give architects directions on what we need to do. I design with a profile of what the ultra-wealthy really want,” Frank instructed.
Frank answered a few more questions and signed a few of his books.