02 Jul Pivoting After the Real Estate Market Crash (And Two Attributes that Will Help You Succeed)
There’s no time like the present to prepare for a real estate market crash and lay down the foundations for a recession-resistant business. Discover how you can do just that.
The 2008 financial crisis was a major headache for us – but it wasn’t a complete disaster. In fact, it actually helped us lay down a recession-resistant foundation that has helped us until today.
But it took us a while to find our bearings, of course.
We were even caught in the thick of the storm for four years, between 2008 to 2012. That’s when we were forced to restructure nearly everything. Yes, we wound out, sold off, liquidated, renegotiated, and dealt with creditors and repossession companies.
It was a stressful and arduous time, but it also forced us to think strategically.
That period helped us to figure out all the weaknesses and redundancies in our business model. We figured out exactly who we needed for our internal team, our wider network, and specific mastermind programs. This meant pinpointing specific mentors, attorneys, accountants, entity structuring people, partners, and vendors.
Our ultimate goal was to put together and design a bulletproof niche – one that could weather any future storm after we re-entered the market.
This meant sticking to the boundaries we carved out for ourselves, our dream team, and our mentors. We drew a box around all the things we wanted to stick with over the long term. That’s how we kept ourselves from deviating from the lane we initially carved out.
In August 2013, we hit the ground running. And by the end of that year, we had cranked out 13 deals.
The rest, as they say, is history. We’ve stayed in the lane ever since.
Want to know what the building blocks to our recession-resistant foundation are and how we turned things around?
3 Paydays™
Why would you ever want to get paid once when you can have 3 Paydays at your fingertips?
One of our key innovations that came from the real estate market crash was creating 3 Paydays per deal as opposed to getting paid once like a wholesaler or flipper. In fact, we even trademarked this real estate investment service with the United States Patent and Trademark Office (USPTO).
Here’s an overview of what the 3 Paydays involves:
Payday #1: The buyer’s non-refundable and upfront down-payment
Payday #2: The ongoing spread (the buyer’s monthly rental or lease fees, minus the
the monthly payment for the underlying debt)
Payday #3: The markup (the final cash-out from the property sale, including the property
markup and the principal paydown over the term)
Naturally, some deals earned us more money than others. But when combined, our 3 Paydays allowed us to make $75,000 on average PER DEAL. Our Associates who began using this approach also earn that much.
The 3 Paydays also helped us generate continuous cash flow and wealth. And unlike wholesaling or flipping, it doesn’t require constant attention from us.
No Personal Guarantees
You can sleep much better at night and avoid financial crisis by not guaranteeing personal debt.
I can’t stress this enough because, in many of my strategy calls, my students tell me, “Hey Chris, I bought two or three properties. My credit’s good. That’s fine, right?”
It’s not fine!
In fact, it’s never worth it to sign personally on bank debt.
Win-Win-Win Relationships
What’s the difference between a win-win-win relationship and a win-win relationship?
The answer’s simple.
There are three sides to win-win-win relationships and each party needs to benefit at the end:
We look for sellers who we can truly help
We look for buyers who have probably lost hope about getting into the property market
We look for deals that allow us to win as well
This might sound like a no-brainer, but it’s not the industry norm.
The reality is that there are plenty of real estate mentors out there who don’t care if a buyer gets qualified. In fact, they actually want the buyer in their rent-to-own deals to fail.
Why?
So that they can collect their non-refundable deposit and replace them with another buyer.
Yes, they can get away with this by doing all the paperwork. It might be technically legal, but it’s definitely morally and ethically bogus. And that’s not a formula for long-term success.
We always want to set up our buyers to win.
That’s why once you have all three sides of this triangle, you achieve financial gain while helping your buyer and seller. This approach allows you to positively impact multiple families, including over two or more generations.
The perfect triangle comes from being part of a movement, changing lives (including your own), and winning financially. That’s the perfect storm, right there.
The Two Things You Need to Step into the Right Mindset
As mentioned, it took us 4 years to lay down the foundation for a recession-resistant business model. Fortunately, you don’t have to take that long.
In fact, you can probably achieve something comparable between 120 and 300 days. But that will require two specific mental attributes.
First, it will demand serious commitment.
You have to have some patience and understand that building a long-term foundation for your real estate investing business takes time. This is definitely not a get-rich-quick endeavor.
Second, you need to be 100% coachable.
With my students, for example, I generally expect a 36-month commitment. They have to put the blinders on for 3 years with me. Also, they need to wipe the whiteboard clean and trust the direction I’m taking them for that long – No looking left, right, or backward.
If they can do that, they’ll gain an amazing and transformative experience. That’s how they can fast-track their journey to predictable profitability.
Taking Your Real Estate Investing Business to the Next Level
Despite the challenges and difficulties in the real estate market, opportunities to develop some serious wealth are at hand.
Just think about that proposition for a minute…
If you’re intrigued, I’m more than happy to walk you through what that could look like for you and your real estate business. Whether it’s by joining the Wicked Smart Community or signing on for one-on-one coaching, now’s the time to invest in yourself.
Take your real estate investing business to the next level by acting boldly in this unprecedented market shift and financial crisis.