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This week Bruce Norris is joined by Philip Tyrone, who Bruce counts as a friend. He made a very kind gesture to his wife as she went through her illness, something Bruce will never forget. Surprisingly, Philip was not always popular and was denied entrance to all of the universities he applied except for one, and four years later he ended up being Arizona State University’s man of the year. He has been an entrepreneur from the start, buying and selling gold and silver in elementary school and later establishing an audio resell business in high school. As a mortgage broker he created 720creditscore.com to help his clients increase their credit scores and improve their financial situation. Originally a book a workbook, the product expanded to become an infomercial, a teleseminar, and an online wealth enhancement course.
Bruce talked about Philip’s start as an entrepreneur. He said everyone knew at least one kid who did that who was buying things like M&Ms then selling them to another by the piece. When Philip first did business with gold and silver, he was only about nine or ten. He remembered one day he took money he had saved and went down to the local gold/silver store to buy a gold bar. He remembered seeing the price of silver, and at the time he was buying it and the gold at about $12-$15 an ounce. It later went down to nothing, and now it is about $30. It is probably about a .0005% return. Once he bought it he accumulated it and kept it for a while because it did not come back until recently. He saw no reason to sell it and figured it would be fun for the future. Bruce wondered where the entrepreneurial bend came from. Philip said both his parents had an entrepreneurial side, and his dad especially was always about where you could add value in people’s lives. Philip remembered when he was really young he opened his own little bank inside his house and would hold his sister’s money and pay her interest along with giving her loans.
Philip said looking back at some of the struggles he had when he was younger, he is grateful for them. Until the ninth grade he talked with a bad lisp and was very small to the point where in his freshman year of high school he was 4”9’ and 90 pounds. He said he grew into his ears, but at the time his ears were huge. People would often pick on him. However, he said when you combine this with his parents’ divorce early on, he looks at these things as turning him into the person that he is. He looks at it and says he would take all of that and combine it with his parents’ tremendous work ethics and his dad’s view on adding more value, and it made him into the person he is. He said he is not complaining, and he would not change a thing.
With the loan volume that Philip had at one point, his schedule was pretty crazy as far as hours kept. He was a workaholic. However, ever since he has been married there has been a pretty big shift in what he does. When he was in the mortgage business, no one worked harder than him. One time he was driving to work on a Saturday morning at 4 a.m, and he was half asleep parked at a light. He was at 12th street and Wilshire Blvd. in Santa Monica. While his car was parked at the light, he looked to the right and saw these guys who had been partying all night. He looked at them and thought to himself there was no way they would catch up with him; he had such a competitive advantage on them. He was going to work, and they were going to be sleeping until 2 and hung over. His work ethic was great, but what happened was over time things changed.
He was married almost seven years ago and has three kids: a five, four, and two and a half year old. His focus now is how he can bring in the added value to the world that does not require his time every single moment. The questions he asks is, “Will this opportunity give me more time with my family?” and “Can this opportunity be leveraged without relying on his time?” This is pretty ingenious, although tough to manage sometimes. It requires a lot of thought and thinking up front and trust that it is going to work out. We are all in this age of technology and can all leverage the microchip. This is what he is leaning into as he looks at it and asks himself how he can lean into the microchip and take advantage of every technological opportunity that we have. He does not have to do all the things he did ten years ago, and it is working. Looking back, during the transition he said he doubted a lot. He talked to Bruce at the time when he was blowing through money and wondered if he was making the right decision. Fundamentally, however, he did not believe you could go wrong if you put family first. If you put family first, it has to work out.
Philip has spent a fair amount of money trying to figure it out. In his biography he talked about how he spent a half million dollars on personal coaching and development, which is a lot of money. When Philip and Bruce first met, he talked about how he had signed up for one of Bruce’s classes that he ended up not being able to make it to. He asked him how much it would cost for him to speak to him one-on-one for a day. He thought he was going to tell him $25,000-$50,000. He had such faith in Bruce that he would have paid whatever he asked. After the day was over, he asked Bruce if he realized the value that he just added to him and should have actually charged more. This was the only time Bruce had done something like this. He does a lot of consulting, but it is not for fee. I always thought it was interesting as he thought the price he had given him was too much, which was actually his original intention. But Philip was tough to deny.
When Philip has somebody who he would like as a personal coach, Bruce wondered what the criteria are that he looks at in the person’s business life or in the person to say he is willing to accept them as a mentor. Philip said one thing he has learned is he very seldom looks for complete packages because he cannot get deep enough to understand and get to know personally everyone in every aspect. For example, when he first came across Bruce and started reading his report that he realized he needed to go deep with this side in real estate. Later on, he found out that he had a lot aligned across the board, but initially he did not know this. Initially it was only real estate, and this was why he spent so much money since he had so many different mentors in a lot of areas of his life. He and his wife meet with a lady every single week to talk about how they are raising their three kids. He had one session where he was asked how he handled specific things with his children and what feedback should be given.
He has relationship coaches and is very close friends with Harvey Mackay. He has really helped him at networking in a very high level. One time he was at breakfast with him a year ago, and he asked him what his 20-year goal was. Philip told him being Catholic he wanted to be the ambassador to the Holy See, and Harvey told him that’s easy. He told him he has to start building the process now. In 1979 he was sent to court the relationship with Fidel Castro, so he has been down that road. He had to look for people who had been down the path. If there is someone who does not have the integrity and he sees a void in breakdowns in our value system, then it would not work. For the most part he goes really deep in trying to find someone who he wants to learn from in that specific niche.
If you put it under an umbrella of credit improvement, Philip’s niche is not always filled with desirable characters. Bruce wanted to differentiate between what Philip actually does and some of what people think a credit repair company is. Philip said his 720creditscore.com site all started with his bad credit. He walked into a bank one day when he was overdrawn on his checking account, and this was back when Home Savings of America was still around. He walked in, and the lady said he was overdrawn on his checking account, which was embarrassing to hear. She suggested he apply for overdraft protection. She ran his credit report, came back, and told him his credit score was too low and he could not qualify. He could not qualify for $100 overdraft protection. At the time he was in the mortgage business; so he came back, ran his credit report, and found he had a credit in the low 600s. It was not that he was blatantly late, but there were errors and certain tricks to the trade he had not done. He looked at his mortgage, and he told himself if he asked himself what he could save if he had a higher credit score, even on the 32 bedroom 2 bathroom house he had alone. He literally could have saved between $500-$600 a month. This was when he realized if he could not get himself the best loan possible, there was a breakdown in integrity when clients came to him and expected him to get the best loan for them.
He started using his credit as a guinea pig as well as tested out other credit repair companies; and one person he paid to clean up his credit had actually done something illegal, unknown to Philip. It actually threw off his FICO, so when he tried to purchase investment properties, FICO would not even give him a credit score because they thought he had fraudulently written a letter, which he hadn’t. They had no proof his credit guy had written it, so they released it. However, he learned from this that in the mortgage business in dealing with these credit companies that, for one, they are not predictable and often do things that are illegal. Back when he was in the mortgage business his average loan size was around $1 million. This is a large commission, and he saw himself losing loans because he would refer a client to a credit repair company, and then they would not follow through or not get the work done. They types of companies are not bullet proof because they rely on the actions of someone else. What happened was when they did not get the credit done, he lost the loan. He realized this was a bad. He was referring someone for credit repair and was not getting paid on it, and he was therefore losing a $1 million loan.
He built the structure based on what he learned from his own credit. He learned there were certain things you could do that repairs your credit. Philip has a different philosophy from what credit repair is about. With credit repair, it is about getting something off of your credit report. However, his philosophy is completely different because according to certain credit reporting laws, you cannot take something that is legitimately late off a credit report. He will not even go down this road. He says, “Great, you have a foreclosure or short sale, fine. But we need to rebuild your credit around the foreclosure and the short sale to make you lendable again. He has had people who were bankrupt one day, started re-establishing their credit through his system, and they could literally have 7 point credit score in 6-12 months. It depends on how quickly they open their program and how bad their credit was. Some people had bankruptcies and ended up having 100 late fees; and some had bankruptcies and only about five late. There are numerous aspects, but it works and literally works every single time. In terms of numbers, they had over 12,000 people go through the program. This is not an idea that he had that he entrusted on 42 friends. He had 12,000 people go through the program.
Bruce just wrote a new report, and in part of the research he has done he read of a lot of things for Fannie, Freddie, and FHA. Who they are loaning to right now is very different than who they were loaning to originally. For example, in 2006 45% of FHA loans were the FICO scores under 620. In 2012, it was 3%. This shows how radically the loan business has changed. Having a good FICO score is not just about saving money, it is really now about having access at all. This is much different. Before when you were in the loan business, there were lots of tares. Most lenders did not even want to go through the struggle of documentation. You were doing a stated income loan that was legit, but it was easier and no big deal. If that did not work, you had other gyrations that you could do, and somebody who could fog a mirror up could ultimately get a loan. This is not true now.
This process is very important because right now in Riverside, for example, about 62% of all sales involve somebody that lost a home already to the bank; so it is an REO or a short sale. 62% of the time when you close an escrow, a buyer does not emerge from that escrow. A non-qualified person emerges who has to find housing. You do this 1,000 times and then 10,000 times, pretty soon area changes as well as who is making up and who is inside the home. This is not so hot. There are a lot of misconceptions about someone who has a foreclosure and is out for a certain amount of time.
The common misconception about how long they are done for is typically seven years. They think it is seven years because foreclosures and anything on their credit report is going to stay there for seven years. If someone has a bankruptcy, people think it is ten years. The sad thing is that this is completely misleading for numerous reasons. They think that once you have a foreclosure or short sale, if you do nothing then the short sale or foreclosure falls on your credit report and your credit will rebound. This is not the key thing. There is no secret to what Philip Tirone’s business does. They rebuild people’s credit. If you have a short sale or a foreclosure, you need to re-establish credit instantly in the next week. There are credit card companies who will give you credit, but something that people do not realize is that 46% of credit card companies report the wrong information to the Credit Bureau, which has a negative impact on credit score. This means if you have three credit cards, you have a 50/50 chance that each of them are not reporting the proper credit limits or credit information to the Credit Bureau, which impacts your credit score. You need to know what credit to obtain and where to obtain it. On one of Philip’s websites, if you have poor credit but you have a720 secured card, those are credit cards that absolutely will report all credit bureaus, will report the right credit, and approves every single person. If you do not get approved by those cards, then you filled out the application wrong.
If you would like to check out Philip Tiron’s website, go to 720creditscore.com. On there, you will see a pop-up where you can have a free report mailed to you. After receiving the report, there is a free webinar you can attend that is full of value.
Tune in next week as Bruce continues his interview with Philip Tirone.
For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.
