This week Bruce is joined by Tony Alvarez and Mike Cantu. Both names are household names in Southern California real estate investor buying. Bruce has known both of them for many years, Mike the longest.
First with Mike, he got started in the house buying business almost 30 years ago from a late night infomercial he watched. After seeing the commercial, he hung onto every word, fell for it hook, line, and sinker, and said he was a bit naïve. But, he said he was glad he was naïve because he believed every word of it, and it actually frustrated him the first year because he wasn’t doing quite as well as the guy on the infomercial. But, he knew that if the guy on the infomercial had done it, then he had done it. He never suspected at the time he might have been an actor. And this trend to fall for education has continued in the way where Mike is an education fanatic, so his attitude has always been, “As long as I am in the game, I will be a student of the game.” Real estate is a moving target every year; they have a different playing filed, rules, and numbers. This year is certainly no exception, and in one of the first classes Mike went to, the instructor said, “When you’re green you grow, and when you’re ripe you rot.” He is not ready to be put out to pasture yet, so he will continue educating himself. Prior to work, from 16-21 years Mike was a professional skateboarder on the Pepsi skateboard team. This was his job that he loved, but it wasn’t until that job ended that he got a taste of the real world and thought that it was going to be a bit tough. He had gotten used to several things by then in real estate, and the benefits it had to offer seemed to fit the mold for the lifestyle he was looking for. During the second month of his junior year of high school, he took a proficiency test and proceeded to go to community college at night for almost 11 years. When he was 16, he had an attitude that he knew everything and then some; and he even said, “I know everything I need to know except two things and they haven’t been invented yet, so I’m not going to worry about them.” As the years went by and he got older, he realized there was a lot of missing pieces. Once he was exposed to what he didn’t know, he then became good and frustrated and realized it was going to be a lifelong education process. When he was going to community college to receive his education, he would typically take one class at a time and only missed one semester during the full 11 years. He took every real estate and business class they offered. The first year he took a couple basic courses like psychology, which was actually one of the big breakthroughs he had in life.
Next with Tony, his story is very similar to Mike’s. He first got started in the real estate business when he purchased every product he could get his hands on from an infomercial hook, line, and sinker. He went through some of the products, but most made it to the shelf. He actually never finished high school, having dropped out with only 1 month to go. He also went on to take classes at a junior college, including all the real estate classes. If you added up all the classes he took, he probably took more units from college than most of the people who were there teaching. Even though it was originally the commercials on television that sparked his interest, he had a desire because he came from another country, from Cuba. He grew up in neighborhoods where Tony didn’t have much while the other kids did. One example was while everyone else had penny loafer shoes, he had the black tie shoes from a second-hand store. He was thinking at the time, “Some day I will have enough money so I can have those penny loafers.” So he decided to become an appraiser. Once he took all the Dave Deldado courses from the television, he went out and started buying right away. He jumped in and started looking at houses in Burbank. In one specific situation, he was looking at the first house he was going to buy, a fixer-upper. He had taken his mother with him, who is a big negotiator. When they opened the door of the house, a bird flew out where there was supposed to be windows, and immediately she turned to the agent who was there and told them they were trying to rip them off. He was standing away from the house, and the agent came up and put his hand on his shoulder and told him, “You have to buy this house because it is a great deal.” This has never left Tony because this was the moment where he realized he really didn’t know what he was doing and was completely relying on someone who was trying to make a commission to him. This led him to become a real estate appraiser because he wanted to understand how to identify value. This led him to stay up late studying up on how other appraisers chose to do their financing and their underwriting, where he said he received his real education.
Bruce wondered what part negotiating skills happens to be cultural versus studied. Ironically, Tony said he reads a lot of different articles in the morning and is up to about 42 different places that he goes to for sources. One particular article that came across his desk was about Cubans negotiating on street corners for homeownership. For Tony, negotiating and being Cuban are synonymous. It is in their culture. Anybody from California who visits Mexico will see you can’t leave the country without negotiating for chicklets. Tony said he watches his mother negotiate at the grocery store, and all the times he saw her do it he thought it was normal and didn’t think anything of it. Mike, on the other hand, had to learn to enjoy negotiating because he did not grow up in a negotiating household. He was the introvert in his family, so learning to interact how to negotiate with people was very uncomfortable early on. After a few victories, he realized the only thing standing between him and anything on the planet is him asking. It wasn’t his goal to be a great negotiator, but it was his goal to be a great “asker.” He has had wonderful things happen just from asking where he knew there was 0 chance of anything happening without the words coming out of his mouth. Even though he said he has gotten turned down a lot, he still asks. Most people don’t realize that anybody in the real estate/appraiser business that has been successful is probably the most rejected people on the planet. You have to smash the rejection gauge and get over it. Mike has a card with some of the things he writes down while negotiating. One of the things he writes is a reminder to just ask the question, no matter how uncomfortable it is, you have to do what you have to do. When he talks to sellers on the telephone, he likes to start with a blank sheet of yellow paper. Few words will come to mind, but “ask” is always one that gets written down. He doesn’t make a list, he writes all over the page; and they’re just random thoughts, off ramps, segways. They’re things other people have told him that are going to be revisited.
Mike is huge in goal setting. One of the first books he ever bought was called Lazy Man’s Way to Riches, by Joe Karbo. It had nothing to do with real estate, and he had no idea what it was. But, in the book it said to write your goals down, and Mike figured the writer knew what he was talking about. Mike followed the book to the letter, putting everything down on 3×5 cards. He remembers reading an article shortly thereafter called “Princeton Graduates: Twenty Years Later.” In the article, the interviewees went back and revisited the people in the class. 3% of the class had written goals, 97% didn’t. The 3% that did have written goals had a combined net worth much larger than the other 97% combined. Along with what he had read in the book, he is now a believer to this day to write down your goals. To this day, he has written goals that he updates regularly and reads every morning and night with no exception. Some of his original goals were pretty meager. He had one goal he wrote before he turned 18. In his first goal, he had already made a $20 deposit, but his goal card said, “I, Mike Cantu, am the proud owner of my four re-tread tires from J and J Tires. I have gotten them off layaway and have paid the $40 balance in full.” That goal actually did come true because only three days later he had to pull off the side of the freeway, pull out a steak knife and cut off a big piece of flapping rubber. His other goal that humors him to this day was about how he figured if he was going to be a business man he would need a suit. His card said, “I, Mike Cantu, am the proud owner of not 1, but 2 business suits. What is interesting about goals is they are basically lying in advance. Most of the times when you are making your goals, some of the things you write are things that are not even in your reach. When you start writing about how you want free and clear houses, at the time you’re writing it to inspire yourself, it’s kind of remote. Mike says he has never had this problem. Once the ink hit the paper, he believed it and it became real. This is one of the secrets of writing goals. In the book Lazy Man’s Way to Riches, it talks about the subconscious mind that starts dealing with it as if it’s a fact. If it’s not a fact, it’s uncomfortable and gets it there as quick as possible. As soon as Bruce makes a goal, his mind begins tracking and refuses to pay attention to things that normally would be tempting. Instead, he just says he can’t do that. Mike says he would have a tendency to get frustrated because it would take a long time for the goal to be achieved. Bruce said part of him is always surprised how quickly goals are obtained. He took a Jim Wrung course one time, and in this course you divided your goals into 1, 3, or 5 year goals. When you are writing five-year goals, you really have to think way out there. Then you find out it only took you a year and a half to achieve it. With all the goal-setting Mike has done, he has noticed two patterns. First, we have a tendency to way overestimate what we can accomplish in a year. Second, we have a tendency to way underestimate what we can accomplish in five years.
With Tony, goals are and always have bee a part of everything he does. The difference is Tony has limitations in his ability to focus his attention. He did not think of them so much as goals as much as they were his to-do list of things that needed to be accomplished and places he needed to go. This started really early on, and it was really a way for him to keep his focus. The one thing when you speak about goals and what you can accomplish within a year or five years is a lot of times when we set goals we think in terms of what we are going to do proactively. However, there is also something that almost takes on a life of its own the minute you get your focus right. Tony’s focus becomes almost laser once he wants to do something. If you talk to other people, like in business, and you tell them what you want to do and where you are going and believe strongly enough in it, then they can’t help but get on board with you because they feel like they are going to miss out if they don’t.
There are some things for Tony that is non-negotiable. One of these is talking to his grandson. He talks to him everyday, and he makes sure he has that communication with him wide open. His grandson has his own computer and cell phone, so he cannot find a way to tell Tony that he couldn’t get to him. His grandson has become the star of his life and is the one thing that really keeps him going because even in business now, if you experience a certain level of success it is actually the worst thing that can happen to some people. It’s like having a goal that you set, and then the next day you’re wondering what to do with yourself.
Mike’s non-negotiable goal is reading for an hour a day. He has his cooking timers, digital minutes and seconds, and his three reading chairs. He usually has multiple books with him and several different topics going. It has been a goal for many years that once he realizes what he doesn’t know, his goal is to go to bed a wiser man every day, wiser than when he woke up in the morning. This was the best discipline that he had instilled into his day to day life. Looking back at the tens of thousands of books he has read over the years, his comment is there are wonderful things hidden between the front and back covers of every book and he is amazed at the sheer volume of books. He just finished one book he always wanted to read called Walden by Henry David Thoreau that was a slow read but he got lots out of it. Bruce and Mike talked one year about him possibly rereading his library, which he said he has considered. He has what he calls his all-star library in front of his reading chair of his favorite books. Several years ago he heard someone say that you should reread your good books. If they worked the first time, they may be better the second time. So he made a list and methodically went through his best books, and he found himself underlining different things because he was at a different part of the trail in life. He has even gone back and read some of his books a third time and some he said may even be read annually.
One of most powerful tools in Tony’s house buyers tool bag is making friends. It makes negotiating an easier path because inherently people pick up that you’re safe. Whenever Tony does anything, if his heart is not in it, he is not going to be any good at it. The only reason he has succeeded at this business is because he was less about the numbers and more about solving the problem. Still today he is working in his area with the mayor’s office and trying to create solutions for things having to do with blighted neighborhoods and other similar things. Tony has been dealing with this problem for years while the office still thinks it’s a big problem to deal with. They don’t see the people behind the situations. If you had removed this element, then Tony does not believe he would have done as well in the business. He learned a lot of the trade from watching his mother and her negotiating almost everything. His mother would often clean and cook for the nuns in the convent and would often bring her children with her. She had the opportunity to meet Robert Kennedy while she was cleaning as a maid at the End over End and the Philips Academy. They put her back on the plane when she learned she had cancer so she could die in her own country of Cuba instead of the ten feet of snow in Massachusetts.
Mike’s best tool has been being able to communicate with people, having a conversation not necessarily face to face, but basic human interaction 101, being able to establish some repoire, and then following up with a written offer to purchase. He makes lots of offers and has always had the attitude that writing offers is like playing the lottery for free. If he can extract enough information out of a conversation to come to a conclusion what the seller was looking for and then put the offer in writing and get it in front of him. Mike loves humor when negotiating. This is the main thing he and some of his friends have in common. It is smart and also second nature to Mike now, but negotiating for him was learned. He has a yellow pad where he captures the path for a specific person and then goes back and visits it. The morning of the radio show Mike had gone into his office and had a couple letter response calls over the weekend. He called the person back, and after their initial back and forth, he told Mike about a property. Mike asked him what he would like to see happen and just let him run. When the guy paused, Mike asked him what his second choice was. And he told him exactly what it was.
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