Growing up poor in LA
My brother and I were raised by a single mom in Los Angeles. We lived in poverty, and there was never enough money. People who are well off have a hard time understanding how bad things can be for those who grow up poor. We knew what it was like to have nothing to eat at night and to go to bed with our stomachs growling. We knew what it was like to walk to school every morning because we didn't have money for the bus. We had holes in our shoes. We put newspapers in our shoes so we wouldn't get holes in our socks. The neighborhood was bad, and most of the people who lived there had hit rock bottom through alcohol, drugs, and crime. Few kids ever escaped but I had a dream, and dreams can come true.
I remember Christmas time when all the other kids received their new toys, and we had none. But we knew that those toys were temporary, and the things my mother gave us--like unconditional love and the principles to live our lives by--were forever. She gave us the love and understanding that only a mother could give. These principles and ideas don't disappear, and I've shared those same principles with my family as well. My mother also gave me the encouragement to dream, and at an early age, I was definitely a dreamer, but my dreams were not yet focused.
Daydreaming my life away
I was 17-years-old, in my junior year of high school, and a champion daydreamer. I typically finished my work in class very quickly, and then allow my mind to wander. My body was in the classroom, but my mind was gone, far, far away. I traveled in my dreams and did some wonderful things. One of my teachers saw my daydreaming as a problem and said to me one day, "You know, Reggie, you're such a bright kid, but I'm so worried about you. Once you finish your work, you're always daydreaming, and I'm worried that you're going to dream your life away. People who dream their lives away don't amount to anything. So, I've got a solution for you. When you finish your work here, I want you to read the next chapter and get prepared for the next lesson."
Well, my teacher's heart was in the right place and he meant well, but I don't think he knew much about the power of dreams. Dreams are the fundamental building blocks of creation itself. Take a look around you. Everything you see in life was an idea before it was manifested into this world. It was a dream in someone's head.
Problems lead to solutions
Everything you see was born from a problem that needed a solution. And we find solutions from our dreams and the ideas that we have.
I remember hearing a story about a man who was left standing in the plains of Wyoming without clothes. Someone had taken his clothes and left him there. What would it be like to be left standing in the snow without any clothes on? As human beings, we find solutions to the problems that we have in life. For example, if the man in Wyoming was to survive, he'd have to find a way to warm himself up. He'd have to find a way to build himself a shelter and start a fire to stay warm. Maybe he'd find a way to kill a large animal. He could wear the skin of the animal to keep himself warm. He could use the animal for food.
When you're faced with a problem, you can come up with a solution. In life, everything around you is a problem that has been solved. When early man got tired of sitting on hard rocks, he gathered leaves, wrapped them in animal skins, and created a pillow. When early man got tired of chasing fleet-footed animals, he created traps. When we realized that the pony express was not an efficient way of communicating, we invented the telegraph. I could go on and on. People are dreamers and creators. Beavers build dams. Bees pollinate flowers. People create solutions to problems.
Dead end dreams
My mother did a great job of raising my brother and me. She taught us the value of honest, hard work, and faith in God, but she needed financial help. As a family, we had a problem and we needed to find a solution. Unfortunately, at that time I couldn't see how school was helping us get out of the situation we were in. The things I was learning seemed totally worthless in relation to making money. Of course I realize now that it would have been better for me to finish high school, but I decided to drop out and find a job, any honest job that would bring money into the house and help my mother. I worked a lot of different jobs, and I didn't care how hard the work was, it didn't matter. I worked as a service station attendant, a welder, a machinist and a mechanic. My employers either didn't know or didn't care that I had not graduated, and I didn't say anything about it.
After a while, I got a really lucky break and landed a fairly good job at the local phone company in Los Angeles! I needed the job and thought there was a future in it, so I went in with the right attitude. A good attitude is always important no matter what you decide to do, especially with real estate. I worked at the phone company for 18 years, and they treated me reasonable well, but my lack of education eventually caught up. I hit the pay ceiling at $3,000 a month, and I needed a lot more. I was at a dead end.
A new dream
As I approached my early twenties, I began to understand that if I was to ever break out of the vicious cycle of poverty - if I was to do better than simply live paycheck to paycheck, I would have to change the way I looked at finance and at life itself. I had to realize that my philosophies in these two areas are what had gotten me to the trouble that I found myself in. I didn't like where I was, and I was ready for a change.
My expenses continued to escalate. I needed help financially, so I started looking for other opportunities, reviving my dreams. It was about this time that I started hearing about "entrepreneurs," and I became fascinated with the idea of becoming one. Unfortunately, there is a big gap between being a wanna-be and being the real thing. I didn't have a clue about where to even begin.
One evening, I was sitting like so many people stupefied in front of the TV, when an infomercial appeared. I started watching it. The man on the infomercial said that I could learn how to invest in real estate and that I could do it in my spare time. That was important to me because I had a decent job at the phone company, and I didn't want to lose it at that point.
He also said that I could learn to make more money in my spare time than I could make on a full time job. Prior to the infomercial, I didn't know much about money. I knew how to work for a living, how to get a paycheck and how to rush to the post office to pay my bills. Anything that was left over was spent. I lived from paycheck to paycheck.
Meeting the love of my life
When you become passionate about the path of success that you choose and you take productive action, doors begin to open for you. This is evidenced by the story that I'm about to share with you now.
By this time, I was convinced that my fortune would be made in real estate, so I began to study the creative investment principles and techniques. It was at this time that I met a brilliant lady that came from a third world country called Belize. This was a woman that completely fascinated me because she came here to America with $20.00 and a dream! Her dream was to become a millionaire - right up my alley!!
It was by complete coincidence that we met (if you believe in coincidences - I don't.) I was looking for a realtor to open a HUD foreclosure for me. These are properties that only realtors have keys for, so I opened the huge telephone directory to the real estate section. I did not have any strategy in mind. I simply needed to find a realtor with a key to HUD foreclosures.
I opened the telephone directory to an arbitrary page. Completely by chance, I chose to focus on the left page instead of the right page. I went about half way down the left page and dialed the number that I simply happened to stop at. The most wonderful thing happened to me. A lady answered the phone who was destined to come into my life and change it forever.
Ersoleen was just about to leave her real estate office in four to five minutes and go home. Do you believe in coincidences? I don't! I could have arbitrarily flipped to a different page in the real estate section because that section in the phone directory was very large. I could have chosen the right page instead of the left page. I could have stopped one number above or one number below the number the number that I chose. I could have called that number five minutes later. If I had done just one thing differently, my life would be totally different right now. I say that because over the last twenty years, Ersoleen and I have built our real estate business together as husband and wife. No, we don't believe in coincidences. We know that it was our destiny that we met and grew in real estate together.
We came to some important realizations
We decided that we could become very wealthy in real estate, but we needed to understand the formulas for wealth. It was simple. It was a combination of continuing to educate ourselves, and taking production action on a daily basis. We enrolled in a two-day real estate class taught by my first mentor, Dr. Albert Lowry. I was astounded by what we learned in the class. We learned a lot about money. We learned how to make it, how to keep it, and how to make it work for us. I was fascinated, and we decided to continue our education in real estate. But more significantly, I was coming to some important realizations about myself and my life.
I was quickly coming to understand the main source of frustration in my life. I was trying to create a "new life" by using the same old knowledge. If I'm going to build a new life, I've got to use some new "tools" that have to come from a new base of knowledge. My old tools helped me to get to where I was--living hand to mouth! Poor! Dismal future! I now understood that there is a science to success, and that science was something I had to learn!!
I discover the power of superior knowledge
The idea fell on me like a ton of bricks: Reggie, you make yourself worthy of superior profits when you acquire and use a superior knowledge!! The acquisition of a superior knowledge in creatively investing in real estate has to be the foundation that my financial future stands on!! I've got it!! A light bulb went on, and still burns brightly today.
Once we have attained superior knowledge, we have to take this precious new knowledge to the next level. We have to find within us the discipline to convert that precious knowledge into material substance - money, benefits, service, better lifestyle, security, or whatever the case may be. This is where the real work is. It's not difficult to acquire the superior knowledge. You can go to seminars, workshops, and boot camps. You can read newsletters, magazines, books, and special reports. You can listen to tapes and CDs, and you can watch videos and DVDs. And you can jump on the fast track to success by investing in coaching and mentoring. There are plenty of ways to gather the superior knowledge. It's the discipline to use that knowledge that makes the difference between success and failure.
Then, the third element in the science to success is taking some productive action every single day toward your goals. So many students invest so much money in acquiring a superior knowledge, but fall down on the job in the discipline and productive action phases. What good does it do you to have all that life-changing knowledge sitting on the shelf instead of in your head? Discipline yourself to take some sort of productive action each and every day to use the knowledge that you've invested in. It may only take a few minutes to make that phone call or write that letter that you've been putting off. It's doing the little things correctly that make the big money in real estate.
I've just shared with you what I call my 3 Cornerstones to Success - Continued Education, the Discipline to use that education, and Productive Action on a daily basis. My philosophy as a real estate investor is to make the most amount of money in the shortest period of time with the least amount of effort and, while doing so, help as many people who need my services as I can. In following the 3 Cornerstones to Success, you put yourself in a position to create success beyond your wildest dreams!!
I started putting my new knowledge to work
Of course my 3 Cornerstones to Success did not come to me as a concise formal statement. I listened to my mentors, learned some basic ideas through some real estate investment courses, and I was determined to get started. It was 1986, and I was making $3,000 per month at the phone company. Not everyone is in a position to jump into real estate and start making a lot of money. Sometimes we may have to do things on a smaller scale. I had very little money, so I started small.
Our first real estate investment was two houses on a single lot sold at a government auction. Our next property purchase was in Pasadena, California, where we bought four units (two duplexes). We rented those units under the U.S. government "Section 8" subsidy program and got a very strong, positive cash flow going.
Learn to work through the problems and find solutions
I was so excited about making some real money for the first time in my life that I wanted to tell everyone, but I was surprised at their resistance. They had a thousand reasons why the things I was doing or wanted to do in real estate wouldn't work and how I would be a failure. Nevertheless, I decided to trust in myself, my mentors, and my new, superior knowledge and move ahead.
Ersoleen and I bought a sixteen unit building with a lot of problems. The building had eleven vacancies in it, and the owner couldn't meet his expenses. However, real estate investors make money by solving owners' problems. Out of the five occupied units in the building, only two were paying rent. The other three needed to be evicted. The problem with evictions is that they can cost a lot of money.
To save money, I decided to learn how to do my own evictions. If you don't have the money or the resources to do something, like in this case hire an attorney, it's not that difficult to do it yourself. There are enough books available in libraries and bookstores and information available online that you can use to learn as you go. I did all of the eviction paperwork myself and my only costs were the filing fees. Once you extract knowledge from a book or other sources, you can use it to make money for the rest of your life.
Knowledge is power
There were other things I needed to learn. The properties that we were buying frequently needed repairs and renovations, and professional contractors are monstrously expensive. Then I discovered a series of books by Time Life about how to do just about anything you want to know I spent many nights lying in bed and reading Time Life books in order to learn about repairing houses.
When Ersoleen would look over a me with that "special" look, sometimes I put the books down, and sometimes times I didn't. My point is that when you become obsessed with your future and achieving your goals, you don't let anything stand in your way. So, I read Time Life books and I started putting my knowledge into action. I learned about plumbing systems, electrical systems, roofing systems, and so much more.
When I hired contractors to do the work, I wanted to understand the different processes involved to get it done. If you don't know about the work that needs to be done, the contractors may overcharge you. On the other hand, if you know about repairs, contractors won't try to overcharge you with higher fees. Sometimes they'll try to test you with questions, but once you learn, you can always respond with some smart answers. I studied books, I watched the contractors and repair people while they worked, and I asked a million questions. When I asked questions, I took notes about the answers. Over time I learned everything I could about different types of repairs.
Take Good Notes
That idea of note taking has been very important in my life; so much so that I consider it one of the keys to my success. When you gather knowledge from different resources, be sure to document it as quickly as possible. It's the same principle you use in classroom settings. After you've taken notes, you must review them promptly. If you wait too long, you'll forget what your notes were about in the first place.
Find a secluded area where you won't be disturbed and start rewriting your notes. When you practice rewriting your notes, two things happen. First of all, you make them legible so that in the future you can better understand what you wrote. Secondly, you remember what you've written. If you just write notes and then look at them four weeks later, you'll probably forget the jest of what your notes were all about in the first place. But, if you rewrite your notes immediately, you'll remember them and that knowledge will stick with you for the rest of your life. You may have to update it from time to time, but it's your knowledge and it's yours to keep.
Find a mentor
My early steps in the world of real estate were successful, I think, because I had good teachers and I learned quickly. Our income was gradually increasing from the $3000 a month I made at the phone company to over $42,000 a month from well-selected real estate investments. In 1988, As a result of my experience in buying properties no one else seemed to want and turning them into moneymakers, I decided to specialize in that area. This decision came about largely because of what happened while I was negotiating for the sixteen-unit building. There were aspects of the negotiations that I didn't quite understand, so I took my problems to my real estate mentor. This man was an experienced real estate investor who was glad to share his knowledge with me. Like any good teacher, he treated me with respect when I was confused. He explained things in such a way that I easily understood, and he gave me constant encouragement.
My mentor told me to call a meeting with the broker and the seller of the building. "Any time you have willing participants and creative knowledge," he said, "you can put a deal together." With the sixteen-unit building, I had willing participants. The owner was willing because there was no income from the building and he was making a mortgage payment every month. The broker was a willing participant because he stood to make a 6% commission on a $500,000 building. I knew these facts, but because I was inexperienced, I didn't know the significance of the information. That's where the mentor came in handy to guide me along the way.
After consulting with my mentor, I went to that meeting with the broker and the owner. I told them I needed some assistance and wanted to put a team together. My plan was to take over the building and rent out the vacant eleven units. I also planned to do all the evictions himself. I told the broker and the owner that I needed them to handle the mortgage payments for a little while until we turned the building around. Once that happened, we would take over the payments. I also told them that I would meet with them monthly to provide a progress report.
Because my mentor helped me, I was able to represent the details of my plan clearly and directly to the owner and the broker. They agreed with the plan, and I went to work. I didn't have any money, so I got a small advance. I had eleven vacancies, so I fixed up one unit myself using my recently acquired knowledge, then rented it out, accepting a large deposit.
I also took the first month's rent in advance, then moved on to fix up the next unit. I rented it out for a high deposit and first month's rent, moving from one unit to the next, repeating these steps until I had finally built a huge cash reserve. After three months I had rented out thirteen of the sixteen units. After all the bills were paid, we had a positive monthly cash flow of over $3,000 and still had three more units to fix and rent out. At the time, I was still with the phone company and making $3,000 each month there. I had achieved financial independence.
The Immeasurable Value of a Mentor
Ersoleen and I made a lot of money and everything worked out well for me because a number of factors came together. It was a high rental market at the time, to be sure, and I learned everything I could about the business, but I also followed the guidance and counsel of my mentor.
For years, I have had the opportunity to work with highly successful people from all walks of life, experiences and backgrounds. These amazing individuals achieved their dreams in the three critical areas of life to find personal, professional and financial success, in spite of the odds being against them. Many rose above their circumstances and accomplished what others thought to be impossible. Each had a gripping story to tell and each had compelling lessons to share.
Early on, I made a conscience decision to seek out qualified, compassionate and highly successful people. These individuals became my mentors, my friends and my counselors. Some have passed on, but their learning legacy is still alive and well. I cannot measure the value of those mentors. I cannot adequately express my gratitude to them.
From these great mentors, I learned first hand the invaluable lessons of how to attain success in life and gain financial prosperity. Those lessons taught by these exceptional people helped me achieve great financial reward, personal peace and a deep love and commitment to share these secrets with others around the world.
To this day I still consult my mentors on a regular basis. The more I learn, the more I realize the need to surround myself with great people and powerful mentors.
A mentor is someone unique, a compassionate and driven individual who is willing to show you the way. A mentor is an experienced and dedicated teacher delivering the how-to formulas for success and prosperity to those who are willing to learn and driven to take action.
Those who take action are special and unique as well. They are individuals who become true students, who take the mentor's direction, apply it and will not stop until they have made it happen. A mentor will take you by the hand and walk you through the process of personal development and financial prosperity. A good mentor will hold your feet to the fire and ensure you stay committed to your written goals and the steps you need to take in order to make your dreams a reality.
I challenge everyone who comes to me for help or advice to make the same decision I did and find the right mentors. As you do this, the fog of uncertainty will clear, and you will become more confident and resolute in the actions you must take in order to get what you truly desire. There are few things more satisfying and personally rewarding, than to see my students excel and live their dreams. I love to see my students succeed
I'm still a dreamer
I started from very humble circumstances, both in life and in real estate, but because I had dreams, and because I learned how to transform my dreams into reality, I have been able to make my dreams come true. I am now an international speaker and educator, an author, and an active real estate investor, specializing in abandoned properties. I teach unconventional ways of finding distressed properties, strategically repairing those properties, and systematically selling them at a price higher than the prevailing market. I know how to turn $15,000 to $20,000 deals into $50,000 to $75,000 deals. I love what I do, and I also love teaching my methods to others so that they too can live their dreams.
Because I was able to find financial success, I could afford to send my son and daughter to the finest schools. My son Keith graduated from the University of Chicago, and my daughter Arlett graduated from UCLA. You can imagine my joy when both of them decided to go into the real estate business after graduation, following the footsteps of their mom and dad. Both of them have their own real estate investment businesses and both became financially independent within a very short time. I have always said, "If you are going to learn something, why not learn something that will make you money?"
Dreams do come true
As a young child, I grew up in the worst part of town and was told by everyone that I wouldn't amount to anything. I was a young kid who dropped out of high school. I heard talk about all the things that they said I couldn't do. I couldn't be a real estate investor because I didn't know what I was doing. I couldn't be a speaker and educator because I didn't have any education myself. You name it, I've heard it. But I'm proud to tell you that every one of my dreams have come true. I look back and understand that it was through the grace of God and the gathering of a superior knowledge that I was able to rise above it all!!
Real estate investing may not be the right thing for everyone, but for me and my family it has been a way to escape poverty, have the things we want out of life, and to help a lot of other people along the way. I believe that my plan, The Road to Real Estate Riches, can do the same thing for you.