Rental Profits Without The Pain – Financing

by | Jul 6, 2018

Go-To Money:

I want to preface this by explaining some of the other strategies that have been taught out there for years. Most real estate investing strategies were born out of the ‘80s, and they actually got their strategies from the ‘50s and the ‘70s.

What was happening in the ‘80s is interest rates for most of the decade were through the roof. In the beginning of the decade they started out with 18 percent interest rates. It was ridiculous.

People had to get creative in how they bought properties; not just investment properties, but unoccupied properties.

The most common strategy that people used was owner financing: where an owner takes 10 percent versus not being able to sell their home, all because you don’t want to go to a bank and pay 18 percent.

Bear in mind how and when and where a lot of these strategies came about. Also, in the ‘80s, in 1986 was the Tax Reform Act. What it did is it removed loopholes for people like doctors, for example. It created a flood on the market.

A lot of properties were dumped on the market because now doctors could no longer benefit as much as they used to be able to from owning real estate. They used to purposely buy properties to take losses. That sounds crazy, but that’s what they did.

Nobody does that anymore, because it doesn’t make financial sense, or doesn’t make tax sense to do that. Keep in mind a lot of these strategies were born out of a time when it was necessary to do something like that. This is not one of those times.

What I advocate is don’t push paper around. Don’t do owner financing. There may be situations where you can do it. I described to you last week where I did one about 16 years ago. I got an 8 percent loan. It was just as good as what I got from the banks, so I did it.

The reality is, though, usually people use these strategies, no money down, for example, because they don’t have any money. At least, they don’t think they have any money. Generally speaking, I would never teach somebody to invest their real estate if I didn’t think they had the ability to do so, if they didn’t have the discipline to get up in the morning, roll up their sleeves and hit the ground running.

They had some income coming in. They had other properties already. They had other investments. Again, back to the skill and the aptitude, they have to have a reason to be there. I would never put anyone in position to invest in real estate who didn’t belong there.

Everybody here who I teach belongs here. You belong here.

What I teach and what I preach is, just say no to financing if and when at all possible. That doesn’t mean that you can’t borrow money. What that means is I want you to limit where you borrow the money from.

I don’t want you to borrow money from third parties for down payments. If you have to borrow money, I want you to borrow it from yourself. I’m going to drop back here a couple screens to another page.

I’m going to refer to this only because it helps me keep track of all these different possibilities. What I want you to do is think about any other types of cash that you have, whether it’s saving accounts, other checking accounts, CDs, stocks, bonds, mutual funds.

All of these are sources of cash. I’m not saying strap yourself silly and spend every dime you have on real estate. However, I actually did that. Once I got rolling in real estate, I realized how beneficial it was. Quite frankly, I got tired of having money in stocks, bonds, mutual funds, savings accounts and CDs.

I had all of those. I had a lot of money in the stock market: literally several hundred thousand dollars. And I had another several hundred thousand dollars for mutual funds. At the time they were UTMA. Now they are 529Cs.

You need to take a stock of what you have right now. This is very important. I would write this down and I’m going to ask you to follow up on this at the end of the session tonight.

What I would do is document everything you have. Look under every mattress, every rock, everything that you have that has cash value. What it doesn’t say on here is other things; like whole life policies and 401Ks. I saved those purposely because there’s a lot of value there. There’s a lot of opportunity there.

We touched on those last week. You also have real estate. You may already own rental properties. You may have your own home. Probably most of you do have your own home. I want you to get to the fact that if you borrow money against your own home, even if you’re involving a bank, you’re really still borrowing against yourself and your equity.

I’m okay with that. At first, I wasn’t. I was nervous. But I started doing it and I got used to it, and I used the equity in my own home. I reused it over and over and over again in the form of lines of credit; not fixed-term loans, but lines of credit.

Because on a line of credit, you can use and reuse that line of credit over and over and over again. If you do happen to wait, say you let a year go by, or two years or three years, and you haven’t used the line of credit; before you start using it a bank may require you to get re-qualified.

In any case, let me go forward here, back to where we were. Financing Just So You Know. Here’s one of my basic philosophies: the bottom line is the more you borrow from other people to buy real estate, the more you’ll be at risk.

The absolute best way to by real estate is to use cash, just pure cash. I know a lot of people out there have heard before, “Never use your own money.” I get it.

The bottom line is, their strategy is to play not to lose. My strategy, our strategy, is to play to win. Two different strategies. Hopefully you all saw the email from last week.

Are you playing not to lose, or are you playing to win? In this game, you play to win. You want to have all the rights of ownership. When you use these other strategies, not using your own money, for example, you are giving something up.

Generally, you’re giving up not only control, but ownership. At the end of the day, the strongest portfolios are those that are owned by their owners, all rights of ownership, and you only owe a first lien to a bank for your first mortgage, at the most.

Here’s why. When you’re highly leveraged, when you’re no money down and you’re 100 percent financed, for example, and you owe a bank a first mortgage, you owe a hard money lender a second loan or you owe another bank a second mortgage on a property, what happens when life happens?

People don’t always discuss that, because it is scary. People don’t always discuss when things don’t go right. The more properties you buy the more odds that something won’t go right. I know that I’m teaching people right now who have been around long enough to have things go wrong with properties, just like I have. It’s going to happen. It’s a mathematical certainty.

The bottom line here is, when something happens, like the floods of 2004, where are you going to be financially? Are you going to be so highly leveraged that you can’t even go one month without receiving rents?

When that happened to me in 2004, I had 12 units, no pun intended, underwater. They weren’t paying the rent, but I was okay. I owned those properties. I didn’t owe other people for the down payment. I had equity for those properties.

I was able to make it through the renovation period without any rents coming in. If I had those properties fully leveraged 100 percent to other people, to third parties, I guarantee you they don’t care what happens. They don’t care who was flooded. They’re going to want their money.

Let’s face it, when things don’t go right the banks say, “That’s okay, don’t worry, don’t make your mortgage payment this month.” No way, Jose. I used to be a banker. I was a banker for 18 years.

They can be kind people, but they’re smart businesspeople. They want their money. People die. People have babies. People get married. People get divorced. People get new jobs. People lose jobs. All these things happen.

God chimes in every now and then and we have natural disasters like floods and earthquakes, hurricanes, tornadoes. Those things happen. You have to be properly protected.

You can get some protection with homeowner’s insurance, but the more protection you have, the more expensive it is. The bottom line is, it’s not a matter of if, but when.

When you get to the position of owning your properties more fully, more rights of ownership, and you owe less, you’re going to be in a stronger position. You want to be in a cash position as much as possible.

You will get there faster than you will believe. You may think with this kind of strategy it’s going to take forever. It really doesn’t. I’m going to explain how in a little bit here.

Here’s what happens when these things go wrong. Now you’re stuck with bad tenants, for example, who may be wrecking your property and not paying you rent. This is what happens when people lose their jobs and get divorce and they split up, or the girlfriend leaves or the boyfriend leaves. All these things are going to happen over time.

Then you can’t get another loan to keep things afloat because the banks won’t lend you any money anymore. You’re fully financed. Get the picture?

Here’s what I was going to tell you. I can show you mathematically how you can build a much stronger, less risky, more profitable real estate empire by using cash and only cash.

If you graph it out, it will look like it takes a while to get you going, and it will. However, when your mega cash cow starts to feed itself, look out. You’ve got a juggernaut that can’t be stopped. You will absolutely make a lot more money.

No one can stop you. You owe no one. Better yet, the next time there is a recession, you will be the one who everyone is running to, to buy properties. You will be king of the world. This is exactly what happened to me in the last recession.

I was able to grow dramatically from the years 2007 to 2008, really. When everyone else was running for the hills, I was snapping up properties left and right, because I was able to start paying things down early and building up equity in my properties that I could use to borrow from to buy more properties.

Let me go back here. What I want to do with this screen here is draw a mental picture for you. In the beginning, when you’re first growing, you will be more leveraged than you will be at any other time in your investing career. That’s because you have to grow.

Real estate is generally deemed to be a more leveraged form of investment than any other forms of investments. Banks expect it. Other investors expect it. Everyone expects it.

You want to control that leverage. Right now, banks have been loosening up. We have banks that we’re going to be sharing with you that will allow you to put down 20 percent and they’ll finance the 80 percent.

Remember last year and the year before? You had to put down 25 percent on an investment property, or even 35 percent in some cases. It’s now to the point where you can buy a property with 20 percent down.

You want to do that if at all possible, so you can avoid the PMI insurance, further eliminating another expense. Also, that will start you off in a solid equity position in your property and a solid cash flow position.

Let’s face it, the less you owe on the property, the more of those rents you get to keep. Back to what I was describing earlier, even if it takes you 60 days, 90 days to figure out how to get money out of your 401K or your whole life policy or a mutual fund or a stock or a bond or a savings or a CD, get that first property.

Use your own equity and your own cash in all cases when at all possible. If you absolutely must borrow, what I recommend is you bring in either an equity partner, or you just do a quick 1-3-year loan from someone that you know and trust. It could be an uncle, a brother, a parent.

That’s okay, as long as the financials on the property will carry that debt and allow you to cashflow. You want to dump every dollar back into paying that debt down. Once you get your first property, now you’re on the road to success. If you can imagine a graph with a vertical axis and a horizontal axis, where the two meet in that bottom left-hand corner, you draw one box for property one.

Don’t worry about how long it took you to get it. My goal here is to have everybody with a property under contract by the end of class, by the end of 10 weeks. Assume it takes another 20 days to close. That’s great.

Don’t use any of that money coming in. You want to use every single dollar of that to pay down any secondary debt you took out. Not the first mortgage, but a home equity loan if you had to do that. If you borrowed against your 401K, you want to pay that back. If you borrowed against a whole life policy, you want to reinstate that.

Just do it. Discipline yourself. The people who are most disciplined the people who follow this approach, are the ones who build the most. They buy the most properties. They cash flow the most. They build the biggest empires in the shortest amount of time. Here’s why.

Now you’re saving that property. You’re saving the income from that property, and you have equity build-up. Now when you go to buy another property, you probably have your regular income from your job or you’re an entrepreneur or a businessman, whatever your primary source of income is right now. You have that coming in, plus additional property.

When you go to buy a second property, you’re going to count the cash flow from that property. Now you’ve got two cash flows coming in from two different properties, essentially, once you buy it. Now you’re saving money twofold from two different properties.

You will be able to build your cash reserves up in half the time it took you to buy the second property in order to build your third property. If you follow what I’m saying, you go from one box to two boxes to three boxes.

When you get your third level, which is three properties that third property should take you half the time it took you to get the second property. Now you’ve got three incomes coming in that you’re socking away. As you can imagine this graph going up, it’s on the vertical axis just continuing to increase more and more rapidly in shorter amounts of time.

In my case it was at the end of the year and I was able to buy a property every month by using a cash flow from the other properties to fund the down payments. When you get to that point, you are unstoppable.

You may not be ready to quit your current job or sell your business, but you’re halfway there. You’ve already met the first objective, which is to have an income-producing portfolio of properties that is funding itself on a regular basis.

You may not be able to visualize that now, but I promise you, if you follow these steps, you will get there. It may be six months for some of you; it may be 18 months for others. It should be about 1 year on average.

I hope that fairly describes the philosophy of borrowing as little as possible and using as much of your own cash, equity, whatever you have available to you. It’s possible to buy your own properties.

Throughout the class sessions here we’re going to get to more and more examples and case studies to give you a better idea for what works in the way of properties.

Here’s a question: “I don’t know if I can get money from my life insurance policy.”

It has to be a whole life policy. It won’t work on term. I don’t know if it will work on universal. Universal does build up a cash value. You have to talk to your life insurance agent to discuss this if you have a universal life policy. Every whole life policy allows you to take money out.

I prefer borrowing it as opposed to cashing out. If you cash out, it’s done. Use it over and over again. As a matter of fact, I will tell you this: some of the wealthiest people I know have big whole life policies and they use them in a large way to by real estate.

I’ve done it myself, but not like some of these guys. They’re doing transactions that are hundreds of thousands of dollars on down payments. They’re using whole life policies to do it.

The reason you want to borrow against yourself and not from others is, even though you’re borrowing, you are in control of the risk. You have contained the risk to yourself. You are not involving a third party.

You’ve already got a first mortgage on it, that’s one person involved. If you do it this way, you can borrow, but you borrow against yourself. In any case, let’s talk about 401K. It’s one of my favorites.

When I was actively employed in the corporate world, I started saving right away in a 401K. I started putting away 6 percent. I didn’t even bat an eyelash. I just socked it away. It didn’t even affect my lifestyle. I didn’t even miss the money.

I built that up to several hundred thousand dollars. Every company is going to have its own little set of rules and regulations, but all of them will allow you to borrow against your 401K. It’s usually a simple application fee. It could be $50, could be $100.

There’s no qualifying, there’s no appraisals, no inspections or anything. Within a matter of weeks you can have your money for a down payment to buy a property. In your cash flow from your property, you pay back your 401K.

I did that over and over and over and over again. That allowed me to buy a lot of properties. It got me to the point where ultimately, not only was I buying a property every month based on the cash flow from the properties themselves, but I had additional capital built up where I could then fund four additional projects.

I see projects as being at four different stages. You’re looking for them; you have them under contract; you’re in the process of remodeling; you’re in the process of either renting or selling. Either one of those is the fourth step.

I want to be able to have projects in each of those four stages, and still have the machine be able to feed itself. That took me five years, and I left the corporate world.

Again, it’s a conservative approach, but it is solid. I did that and left in 2003. It’s now 11 years later and I have never looked back. I know people who go back in the workforce because they were too highly leveraged. They did too much no money down deals.

They did too much stuff where they didn’t have all the rights of ownership. In any case, those are two of my favorites: 401K for down payments and a whole life policy for down payments.

The third one is borrowing against the equity on your own personal home. The fourth one is borrowing against equity in your other investment properties.

You can interchange those last two. You might feel safer borrowing against equity in your existing rental properties if you have them. If you don’t and you’re just starting out, then you can look at your current home and use that equity to get a down payment.

What you do is you look for the banks that are advertising home equity loans. They’ll say, “Get a home equity loan. No application fee.” Those are people who are lending money and will lend it more liberally than banks who are advertising checking accounts.

Banks who are advertising checking accounts are not in the business to lend money right now. They need to acquire cash deposits, because the government requires them to have loans and deposits at a certain ratio to each other.

When they’re advertising checking accounts, which means they’re too lopsided. They have too many loans relative to their capitalization. When they’re advertising loans, that means they have too much capital. They need to lend it out. I go to those banks.

Let me ask for a response from you guys right now. Let’s just call those the top three strategies right now: borrowing against 401K, borrowing against whole life policy, and borrowing against equity in your own home.

Does everybody here see some way to get money for a down payment, before I get into the last place to get money?

Just chime in here when you get a second. I’ll look for questions and comments. While you’re doing that, once you do it the first time, it gets easier and easier. At first it is scary.

I will be the first to admit I was nervous. I was married and I had parents and I had in-laws and everybody sees what you’re doing here and they’re nervous. They hear things and think your real estate is risky.

What they don’t understand is people who make mistakes generally are lacking information or education or proper action.

Here’s one: “Since I’m living at my parents’, I’ll go the 401K route.” Excellent. I like the strategy.

There’s a funny saying that’s almost a joke now. Back in the ‘70s people were saying that people were living in their homes well into their twenties. In the ‘80s it was into their thirties and in the ‘90s it was in their forties. Now it’s people who are in their fifties living with their parents.

It happens. People are starting over. It’s an amazing amount of life-changing events that occur at mid-life. People in their forties and fifties, sadly enough a lot of divorces happen. I don’t know why, but it just is.

Sorry to make fun of that. The last strategy is cash. I know it’s hard to part with, but if you use cash you will be king. Cash gets you all the benefits. Of all strategies, of all negotiating tactics, of all the ways to get the best price on the best properties and close in a short amount of time, it is cash.

If you have cash now, don’t tap yourself out. I actually did. I used my cash reserves for emergencies, because I was having so much fun doing what I was doing. I was getting so much cash from my properties.

I thought, “I don’t even need cash reserves. I’ve got cash coming in hand over fist.”

I’m not advocating that. However, you can do that. My point here is, if you have cash and you can part with it, by golly, us it to buy real estate. That’s the best way to get the best price for real estate. It’s the best way to get their best rates in terms of all loans.

Cash is king. Lenders don’t have these rules for no good reason. They are smart. They know what they’re doing. They know how to analyze properties, the right things too. They’re asking you to use cash because it’s not just good for them. They know it’s good for you.

By the way, here’s the deal: if you’re completely 100 percent leveraged and something bad happens like a flood and you lose 12 units, you might feel inclined to walk away. That’s a sad, sad day, because you walked away from your hard work and your sweat equity, if you have any into it.

Then other people get hurt. Maybe you don’t get hurt, but other people get hurt. However, if you have your own cash in that property, if you’ve got skin in the game, I guarantee you will make it through whatever storm you are going through. I promise you that.

Everybody I ever met who had their own blood, sweat and tears in these properties, their own cash and equity built up, they make it work. I don’t care if you have to go back out there and paint yourself, change doorknobs and do whatever.

You will do whatever it takes and you will do that. That’s the strategy. That’s the difference between playing not to lose and playing to win. I know it’s one of those tough lessons and people don’t like to hear that stuff, but it is a truth.

I want you to hear what you want to hear, but I also need to tell you what you need to hear. That’s just a simple, basic, natural law. It’s a fundamental truth and you can’t violate it.

My goal is to get you there as soon as possible. If you stick with me throughout this course, guys, I promise you that you will be on a cash basis quicker than you think. Tomorrow is going to happen regardless.

You can try these other strategies and you might be here 10 years from now still buying one property a year, or whatever the case, whatever pace you is on. Stick with me, have faith and have discipline.

I promise you, when you’re 50 years old, you’ll be able to do what you want too, and go travel when and where you want and teach classes perhaps, if that’s what you like.

In any case, any questions on any of the cash strategies here, or going back? I know that’s a lot of material in one night. I’m trying to cover all these basics here so we can move on. I’m going to get back to homework here in a second.

The hunt, this is where stuff is going to get really exciting. I’ve got a lot of good stuff I’m going to send you guys prior to next week’s class. There are a lot of awesome tools out there to help you analyze neighborhoods. You’re going to really like that one. It’s getting better and better here.

For homework, I’m going to be looking over here at questions to see if there are any more as I’m going through this. I know we’re getting close to 8:00 here and I’ve got to get off, but I’ll hang on the line as long as there are questions.

In any case, for homework, identify all sources of cash and equity: savings accounts, short-term bonds and bond funds, liquid mutual funds, CDs, whole life policies, 401Ks, equity in your home, equity in other properties. Here’s one I didn’t mention before: credit cards.

That’s because credit cards have gotten a lot tougher these days. I actually did that. If a credit card offered me a deal where I could take a cash advance at no interest for a year, I even did that. I don’t use credit cards anymore; I don’t have to. I have a debit card now.

But back in the day, I had one personal credit card and one business credit card. I think I had a total of $50,000 available credit between them. I was able to do cash advances on them and I was able to buy multiple properties by using those credit cards.

If you have that luxury and you’ve been in this business, that’s an option. If you’re just starting off, don’t do this. If you already have a couple of properties and you understand how to do this, it’s very easy by the way; if you’re comfortable with it, by all means.

You need to make sure you’ve got the reserve cash flow coming in from additional properties to cover this, should something happen like you get caught up in a flood or a tornado or hurricane or wildfire or whatever, depending on what part of the country you’re in.

In any case, that’s the homework. Let me pop back over to the control panel. These homework assignments are generally pretty easy. They are going to get a little bit tougher as we go on.

We’re going to start assigning you guys to agents and we’re really going to start the ball rolling here in classes three, four and five. Things are going to really pick up and you’re going to be required to carve out some time out of your week to roll up your sleeves and take action on these things.

So far, I don’t see any questions. I’m going to keep hitting the old clicker here for another minute or two. I know sometimes if you’re like me it takes a long time to type in a question. I use the old two finger approach, my two index fingers. I never took typing lessons. It takes me a while.

I’ve been on webinars where the host is getting ready to get off and I’m trying to frantically type in my question. Sometimes I get it in on time and sometimes I don’t.

Here’s one. “What percentage of available cash would you recommend to use for real estate investment?”

If right now with interest rates low, I would borrow the 80 percent. I don’t like borrowing. I don’t like it. I like having the freedom of not having debt. However, most of you guys are growing your portfolios. I say, if a bank is going to loan you 80 percent, you take the 80 percent at 4.5 percent interest rate right now, if you can put down 20 percent.

I got to a point where I started putting down a third. Here’s why. Here are two ratios you need to keep in mind: the asset/liability ratio should be 1/3 to 2/3. In other words, if you own $1 million in property, you should not own more than $667,000 on that. That’s the optimal ration on asset/liability. That’s for the properties.

On the income/expense ratio, you should not owe more on principle and interest (that’s the debt; the mortgage payment: principle and interest only) than one-third of your income from the properties. If you’re bringing in $10,000 a month rent, you want to make sure your principle and interest is $3,333 or less.

You’re going to have other expenses. You’re going to have insurance and taxes and maintenance and repairs and potentially water and sewage and vacancies and so forth, maybe property management.

Yes, use cash. Borrow the first mortgage at 4.5 percent from banks for as long as you can.

“I have a free-lock on my own home, free and clear.” That is awesome. You’re in good shape. You’re 59, you’re a spring chicken. God bless you. We have guys in their eighties who are still actively investing. You’ve got a long ways to go, brother.

“Do you consider taking equity from a property as your own cash, or do you consider equity as leverage? Do you mean only use greenbacks?”

I’ll reiterate that. First and foremost, I recommend using cash if at all possible. If you do have to borrow money, borrow it from yourself. In the case of a home equity loan, even though you have to involve a bank to get a second mortgage or a home equity loan on your own personal home, you’re in effect borrowing against yourself.

I know it’s a little bit of a stretch, but I’m okay with that. If you have a 401K or a whole life policy, I say do that first. First use cash if you have it. Then 401K or whole life policy.

After that, you look at equity in other investment properties and equity in your own home. Yes, equity is leverage. Hopefully I answered that.

“I have some equity in current rentals.” Awesome. I would use it.

I’ll tell you what I’ll do: for those of you who are in the class here, depending on where you are, we can help you. We can help set you up with lenders in your area that are investor friendly. Again, you can do the same thing we’re doing, which is look at the advertisements.

We know who’s in the business of lending.

“Would you recommend single-member LLC when wife is involved in investing or partnership?” Very good question. We had a question earlier from a husband and wife team.

Here’s what I did in my marriage: I did set up single-member LLCs, because after thinking things through and seeking advice from attorneys and other investors, my wife and I at the time had our own businesses. Here I’m investing, so it made more sense for me to set up a single-member LLC where it owned the properties and I was the single owner of the LLC.

The reason my wife was okay with that was because in the state we lived in, if I got hit by the proverbial bus, she got everything anyways. She got ownership of the LLCs. There’s some legal estate paperwork that has to be drawn up. That’s a whole different subject, I won’t get into that, but that’s a whole different class, estate planning.

In any case, that was what our answer was. I would say if your spouse is an entrepreneur, a business owner, I would say set up a single-member LLC as long as your spouse is comfortable with that in your state and laws of protection.

Let’s say there’s a divorce that happens down the road. Obviously your soon-to-be-ex-wife is not going to be too thrilled if you have all single-member LLCs where you’re the single member and the estate marriage laws for some reason or another do not allow her to be eligible for ownership or to receive equitable distribution of those assets.

I don’t know any state in the union that does that. In most states, if you go through a divorce, they’re going to look at what you own and when you acquired it. I don’t care if you own it in irrevocable trust. If you own property in an irrevocable trust, which is another strategy, if you acquired these properties after you were married, your spouse at the time of divorce is still entitled to a share of those assets.

You may think you’re protected, but you’re really not. Don’t look at an LLC as protection from claims from a divorce. You’re not going to get that.

In any case, sorry to ramble on there, but that was the answer for us. If your spouse is going to participate with you actively in investing in real estate and they just have a regular 9:00-5:00 job, they’re a corporate employee, not a business owner, then you could set up a partnership-style LLC, bring them on board.

I recommend you both be investors and use another LLC as a general partner. That’s what I recommend. That gives you a bigger shield for liability. That’s what I recommend there. I hope that helps. Use single-member LLCs whenever possible. Discuss it with your spouse and make sure you understand the ramifications.

Let’s see what else we’ve got here. Borrowing against rental properties and 401K, awesome. Most of you have. You’re already thinking and using your brains to come up with solutions. We will continue to do that throughout the course.

Every class I’ll give you homework. We’ll bring up questions. Whenever you find yourself saying to yourself, “I don’t know if I can do that,” “You can’t do that,” or “You shouldn’t do that,” make yourself a promise.

Do this on paper. Draw a line down the center. On the left-hand side, write down all the couldn’t and shouldn’t. “I can’t do this. I shouldn’t do that and all the reasons why you couldn’t or shouldn’t do something.

On the right-hand side, for every one of those reasons, for every one of those excuses, ask the question, “How can I? How can I make this work? How can I make this happen? How can I get money for a down payment?”

Start training your brain to come up with answers instead of excuses. I’m not trying to preach to you. Actually, I am. I am trying to preach to you. That is a valuable lesson that most people have to learn at some point in their life.

As soon as you learn to do that, it’s a cathartic exercise. Get a sheet of paper with a line down the middle. Whenever you find yourself giving a reason why you can’t or shouldn’t do something, ask yourself the question how or why can you do something?.

I promise you, you will find yourself coming up with answers and solutions a lot more frequently. You need to do that. When you’re an entrepreneur, when you’re building wealth and income, you need to think like that. You can’t think like a corporate 9:00-5:00er. You will never get out of the hole. You will always be in the cage as long as you think that way.

In any case, it is now 11 after 8:00. I don’t see any more questions. I’ll do one more quick scan. I thank you all for being on the module tonight. I hope you got a lot out of it. More than anything, I hope this gives you places to look and questions to ask and stretches your imagination and, more importantly, continues to inspire you to move forward in building your cash flow.

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