Whenever Mike buys a property, he gives it a job title, something Bruce has also done himself. He did not start giving anything job titles until he realized that once he had them paid off that we have a set of recurring expenses in life. Every 30 days that 30-day cycle comes around, and this is what most people battle. They get on that treadmill of life, go to work five days a week hoping to bring home enough to support themselves for seven days. Mike realized if he could get the recurring expenses taken care of, then he had the financial world by the tail. As he started getting houses paid off and removing the debt, he would give them a very specific job description. This included the insurance house, medical insurance house, food house, gas house, and any recurring expense. He realized this did not just apply to the free and clear houses. As he continued to buy houses, everything got a written job description. Some of them were to grow up in value, pay down the debt, and harvest the equity to apply towards something else paying off. He has even gone as far as writing job descriptions on post-it notes, like “Leave my life ASAP.” This would be a nasty house he was looking for a wholesale check on. They need to know what they’re there for.
Although both Mike and Tony are very accomplished, both have different methodologies. We have a boom cycle where prices escalate in ’05 and ’06, and Mike intentionally doesn’t sell and is still very happy with this decision. Mike’s mission from the day he got into real estate was to have enough quality passive incomes to live life on his terms, not having to answer to somebody and being afraid of work. He has a challenge being told what to do, especially spending his life working towards someone else’s goals. Mike has seen several people who have gotten to that point who became too aggressive and forgot the original plan was working toward someone else’s goals, not their own and had it all go away. Mike heard his mentor Jack Miller say, “A wise man once said, ‘Once you’ve got it made, there’s no reason to take any more chances’.” With that philosophy, Mike is a firm believer that you need to take things off the table as you move forward in life and don’t jeopardize yesterday’s success by tomorrow’s late night wild ideas. Everything going into the future has to stand on its own because at this point in the game Mike’s number one priority is protecting himself from himself. He can make a mess out of things real quick, so as long as the past is off limits; leave it alone. The future is fair game.
When Bruce and Tony met, Bruce was speaking at the Apartment Association meeting. From day 1, Tony’s pile of properties was ready to go to auction. His job assignment was to create a pile of dough at some point, which worked for him. Tony found Bruce because he had been looking for advice from different people. Bruce was involved in trying to figure out the markets and what they were doing. Bruce was one of the people who gave Tony really good advice; and from there they became good friends. Tony had a specific goal when he first got into the market, having just come out of bankruptcy, and at the time he wanted to make a million dollars, own ten houses free and clear, and get $10,000 a month. He wasn’t looking to set the world on fire. Ten years later, he actually had $10 million before taxes, and he was in shock. Most of the inventory he bought was out in the high desert and the Antelope Valley. Tony wasn’t necessarily buying houses that he wanted or would run up to and hug every day. They weren’t really A-list houses, but Tony wasn’t really thinking in these terms of A, B, or C list houses until he met Mike. He was the one who woke Tony up and said, “You know, you have to take that spreadsheet and break it down into what you want and what you want to get rid of.” This was a wake up call for Tony. He realized everything on his list of houses had to go. He sold out at the peak of the market and cashed out completely. Back in ’05 Tony asked Bruce what month he thought was the peak, and Bruce responded that he had too many properties to change the market and to just dump in his own things. Bruce was the one instrumental in getting Tony to stay a little longer. At the time Tony was ready to sell in the market, while Bruce wasn’t even ready to build in it yet. Bruce was charting this for Rosamond, thinking Tony was really early. Tony was at $7 million and was ready to bail since he had just come from bankruptcy and it had taken him 7 years to get to that much money. To him it felt like he had won the lottery, and he is a very frugal person. The most he has every paid himself is $1,000 a week, and he has no debt and only one credit card. Capital One, who gives a credit card to everyone, threw him out because they were not making any money off of him. As aforementioned, Bruce was the one who convinced him to stay longer and not bail out. Tony actually came to Bruce to confirm that he should sell out, and instead Bruce told him to stay longer because his area was not quite done yet. But what impressed Bruce the most was Tony’s spreadsheet. He knew where every nickel was going, and he is still very cautious and particular about keeping his records. He follows the rentals and knows to a percentage what he is expecting to net at the end of a cycle of a year.
Tony learned something from Mike when he heard him speak once that he has incorporated it into every effort and decision he makes. What he learned is that one Mike is finished with his deals; he will sit back, look at it, and see what he did right, what he did wrong, and what he can do differently. Tony had never done this before hearing Mike. Bruce had just read an article titled “Ten Traits that make you Filthy Rich,” and the one Bruce believes epitomizes Mike is #6, which is reflectiveness. He has never known anybody who takes a look at what they have done over the course of a property, a year, or a life as much as Mike does and analyzes how things went and how they can be improved. If you really do that, then you are practicing with intent. Sometimes you do something for a year, and you don’t improve. However, it is impossible not to improve if you are that intent on analyzing how things went. In Tony’s small office, what he learned from Mike has become a very important part of how he handles things, even in the way he does office work. He has a weekly meeting with his two business partners where he will sit down and looks at how they attacked something the previous week and what they could do differently. When you put this into play on a weekly basis, you sometimes think there is nothing left and your brain is bleeding almost. It seems like there is nothing more you can improve. However, sure enough you find something that you can do differently and expand a different way. This is what has improved him ability to come up with seven deals in a week, which for Tony is a lot. He was very impressed with Mike’s ideas, as was everyone else in the office. Usually, we all feel like we have reached a certain level of competency, and yet we’re all capable of learning from each other. A very smart thing to expose yourself to is being open to learning from people who have reached it a different way, and you just keep honing and making it a more refined process.
Mike has spent more many on education that anyone Bruce has ever known, and there were many who mentored him in this area and planted the permanent seed and caused him to see what his model was and why he liked it. His biggest, all-time influence was Jack Miller, who passed away a couple years ago. It was a sad day for Mike, but he took the afternoon off and went home to his home library. He remembered counting up 46 Jack Miller seminar manuals. There was another dozen manuals where he did classes with other people, every booklet he had written, every newsletter. Jack was such an influence who really shaped him. Others were John Schaub, who still teaches to this day. Mike tells people anything John’s printed he has and is worthy of paying for it. Peter Fortunato has been another huge influence, as well as Bruce Norris himself. When Tony heard Bruce at Jack Fullerton’s years ago, he couldn’t believe the work he was doing right in Riverside. There is a very small handful of people from whom Mike will learn. The #1 requirement is you still have to be actively in the business. There are a lot of real estate hucksters out there who have done a few deals, have good marketing skills, and sell a lot of rehashed, packaged worthless information. It’s sad when he sees the Homer Simpsons of America being taken advantage of. They have a real estate dream, and someone vacuums their seed money out of their wallet. A lot of times the price they pay for those kinds of things could have gotten them into their first deal.
Both Mike and Tony have gotten into the education side of real estate, and for Mike speaking for the first time was not a very comfortable event. He described it as a complete our of body experience. He jokingly said he was off to the side watching a guy that looked a lot like him, and his thought was, “Look at him go. He started talking; can anybody turn that guy off?” He remembered for an extended period of time being off to the side watching the guy that looked just like him go, go, go. He wasn’t sure what he was saying, but he sure was talking. But afterwards, he got a standing ovation and called to tell Bruce that now he knew why Bruce did what he did. Mike thought he was going to need someone to tie a rope around his ankle because they would have had a Mike kite stuck to the ceiling.
For Tony, the first opportunity for him to speak was at an event; and Bruce said he knew more about Tony than Tony. Bruce knew he was going to hit the park. Bruce knew Tony’s speech was going to be the hit, hence why he put him at the end. No one was going to want to follow him. Tony described that day as the greatest day he had besides his son being born. He remembered before he even went in he was getting more and more nervous and he wasn’t sure how everything was going to go. Bruce then asked him what he was worried about and if he planned on lying to anybody out there in the audience. This really shook Tony up, as he knew he wasn’t going to lie. Bruce responded, “Well, did you do this or not?” When Tony said yes, Bruce told him just go out there and tell them what he did. Sat him right back down, and it was a fantastic time. The reaction of the crowd was phenomenal, something he never expected. There were people lining up to hug him and crying. At first he didn’t understand why they were crying, but it was obviously with the intensity that he explained the things he did. He thinks he may have even done too much of this afterwards and got to the point where he realized he could only do this so much. It does take a lot of time and energy. Writing a document is no joke, especially if you’re a high school dropout. The residual is you are probably going to spend part of your day talking to people that took something you gave. Everybody wants to take you to lunch and have you do the whole seminar over again.
Mike’s experience with speaking has been the same. He realizes it does take time and energy, but he also realizes it’s part of the big picture and part of giving back. He had good help early on, and he would not be where he is at today without the help he received. He is happy to pass it on as long as people are going to attempt to use what he shares with them. Earlier Mike had mentioned Jack Miller as his biggest inspiration. The goal of most people is to have done something in their life that had a legacy to it, like Jack Miller did for Mike. Education does this. No one is going to care that you bought 50 houses, but someone will care that you taught them how to buy two houses. This is what education does; it gives you a permanent piece of somebody’s future. This is an exciting and worthwhile thing. It expands the benefits that you have given to yourself as well as broadens and makes it deeper for you.
Bruce believes both Mike and Tony are more passionate about the actual process of buying homes. In just talking to both of them he realizes that if you had a clean slate, no one is going to bother you in the next 24 hours. In that time both Tony and Mike would go see about ten houses. For Bruce, the house-buying business was a vehicle to an end. For Tony, he loves to write and share what he has learned. He said he will speak again, but will be very selective about how he does it. He is considering doing something on a larger and more national basis than just Southern California. He’s giving it a lot of thought because the one thing he values more than anything else is his time. He believes over time and going through everything, being in real estate, losing it, and making it again, he will come out the other side and realize it’s the only thing he has and can’t judge when his time is going to be up. Therefore, he has to be very specific about where he wants to spend his time. Even when doing the radio show with Bruce, he said Bruce is someone who he will go right away if he calls him to do something for him. Tony’s $7 million he had went to $10 million because of Bruce’s direct advice. Bruce was the one who held him still and told him not to sell it. Tony made $1 million for each year that he did not sell his inventory. Bruce understands that there is a lot of pressure when you are on the predicting side. Mike Novak-Smith recently sent Bruce an email about an article he wrote back in 2007 telling him how accurately the things Bruce wrote about were being played out. Tony is now saying thank goodness; but four years ago he wasn’t really there yet. He’s in the same boat now. He starts saying something, he is going to run out and start doing exactly what he said. There is some pressure to this. The one thing that is hard to figure is the desire that both Tony and Mike have is intense. They have had to overcome plenty of roadblocks, and there are going to be these same roadblocks. This is the missing ingredient. It’s like you know to take the phone call and run the ad, but how do you go past getting the fifth no to get the yes at the end. Mike responded that he was recently shared a YouTube video that really hit home. It’s about a five-minute clip, and it’s called “Honey Badger, Don’t Care.” As he watched the honey badger just cruise around, stick his nose into the beehive, get bitten 1,000 times, pay no attention to them, then go over and grab the cobra as it was biting him and chew his head off, he realized this is the exact same attitude you have to have. Honey badgers don’t care; and in the same way you just have to keep on going. You do your best with the people skills along the way; we’re not out to offend anybody or be rude. You just have to get over that. Most people don’t want to approach another person and have conversation, so it’s about doing what has to be done. He was shared a good philosophy many years ago that said, “Do what others won’t for five years, and you can do what others can’t for the rest of your life.” Being the bubbling optimist that he was, he soaked every word of it up and believed it. He was actually quite frustrated when it took him a few more years than five years to where he knew he was in the lower part of the category, but at least he was in the category.
When Bruce had set his goals and went to show them to Jim Rohn at a seminar he was speaking at, Brue thought he was on the slow boat to China. Jim told him it had taken him one year longer than the five, and Bruce was glad he told him this. In a way, we are there right now. We don’t have the luxury of a 20% up cycle this year, so we’re not going to touch a property and have it go up $150 grand and get bonused. The skill to know how to buy something below market is the equity set is going to show up for a while. This is an important skill, because if it doesn’t happen, then you’re going to have less of a cash flow or less of a margin. What we know how to do is a pretty cool tool for equity and cash flow. Tony really respects Mike a whole lot because he has always felt Mike does his job a lot better than he does. Tony loves everything about the work he does, so if there is someone he doesn’t like who he is talking to, he is not there for very long. Mike, on the other hand, has the ability to transcend that sometimes; and he just works his magic. He buys houses over the phone, which is something Tony still hasn’t done yet. Mike rarely meets people intentionally and had an interesting experience the last time he did. Mike said it could have been a self-perception problem that he had because he figured if they met face to face, then it was over before it even started. Over the phone it’s completely different because they have no idea who he is. Over the years, he has learned if he has the opportunity to meet with someone face to face, then he would rather do that. Three purchases ago, the lady lived two and a half blocks away from his office. As soon as she told him this, he asked her what the next half hour of her life looked like, and she said it was wide open. He grabbed a used wicker basket, went out in the yard, grabbed a half dozen of the world’s best oranges, threw in a couple grapefruits, lemons, avocados, then showed up at her door with a gift basket ready to talk business.
Tony’s best advice for someone who has lost everything and has to start over is to get over it as fast as you can. Don’t sweat the small things. We’re really not aware of what we can accomplish. As you start in the business and start meeting other people, you start to realize that there are so many people willing to come to you aid because they also want to do something for themselves. We all want to get there. Everyone in the room during the radio show and probably people Bruce is going to interview next have been people who have in some way made him better at what he is doing or helped him accomplish some of his goals along the way. You just have to start walking into it. You cannot park two cars in one space. If you’re constantly thinking about what’s destroyed you in your mind, which you think is the enemy, nothing else can get in. You have to open your mind up to a completely different direction, and it takes just a very conscious focus and decision. Sometimes you have to walk in the direction where you don’t see what is going to occur.
For Mike, he also says to get over it. You have to restart the car. He knows a lot of people who used to be in real estate that are still sitting in a parked car. You cannot go forward in a parked car. You have to turn the key over and get the thing running again. You have to review the basics, get back to the fundamentals, find a money partner, then go full-on, get out there, go after it, then don’t quit until you have what you came to obtain. In some ways, we forget how we became successful in the first place was probably even in a worst spot than we would be doing a second time because we know so much. We had nothing in the beginning. We didn’t know anything, and we had nothing. The second time around, if you can get over the mental side, is easier.
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