During a global pandemic, people look for ways to be sustainable with survivability in mind. Mike Wolf believes that if you want to transition into real estate investing, then it’s time to start regardless of trying times. Mike is a freedom lifestyle entrepreneur with 30 years of real estate investing experience under his belt. In this episode, he joins Jen Du Plessis to point out the struggles of getting into real estate and what awaits you if you manage to pull through. Taking things one step at a time, doing things right, and putting in the extra effort can make a big difference in the outcome of your endeavors. Learn strategies and disciplines that you can put into practice to ensure that you and the people you deal with create a win-win situation for all parties involved.
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Real Estate Transition: Why This Industry Is Not A Hobby But A Habit With Mike Wolf
I am excited and delighted to have our next guest with us who is Mike Wolf. I had this wonderful opportunity to meet Mike at a two-day intensive that he and I were doing in San Diego for speaking from the stage. As soon as he said that he had something to do with real estate, my ears perked up and I said, “We have to talk.” Let me take this opportunity to introduce him to you quickly. He’s a self-made freedom lifestyle entrepreneur, which is right up my alley. He’s a seasoned investor and international speaker. He’s been investing in real estate for many years and has been involved in several other entrepreneurial adventures. He has an extensive background in business investing in both US and Canada. He loves real estate and talking to people about real estate, but he also has a great story on how this all happened that he jumped into real estate and how he’s grown this big empire of him. He loves helping people realize their dreams so that they can do what they love to do every single day. Doesn’t that sound like me? Welcome, Mike, to the show. I’m happy to have you.
It’s good to see you.
For those of you that are reading, when I have one of my workshops if we ever get out of Coronavirus, Mike’s going to be on stage at one of my events. If you’re interested in participating in one of the events, you’d be able to meet him in person. Mike, I’m delighted to have you. One of the things that I want to start off with is your story. Tell us a little bit about something interesting or something that was challenging early on in your life that has created who you are now.
If we go way back to the middle grade 12, when I was in high school, I literally did not know what I wanted to be when I grew up. My parents were always saying, “You should be a doctor or a lawyer.” By default, I don’t like blood, so doctor is not in the cards. I thought I’d become a lawyer. For anybody who knows me, they know I’m very non-argumentative and non-confrontational. I probably would make a bad lawyer, but in any case, it looked cool on TV. I went to a university to get my first degree, racked up a whole bunch of student loans and then decided before I go back and get my second degree, I’m going to get these things paid off. A friend of mine, his mother was a manager of the phone company, which back then was union and government and paid well. I got a job there. While I was there, I bought my first principal residence and I got a call out of the blue one day from my mortgage broker saying, “If you want, I’ll get you another mortgage if you want to buy another home.” I remember thinking, “Why would I want another home?”
Most people don’t make that call. They don’t say, “Do you want to create some wealth?”
I wish I got that call every day. I didn’t know the first thing about real estate investing, but I was scientific. I thought, “If I’m going to buy another home, I should get close to the one I live in so that is easy for me to collect rent.” That was my due diligence for picking my revenue. As luck would have it, two and a half years after I bought these two properties, the market took off. All of a sudden, I was sitting on way more money than I ever thought I would see back in those days coming from being a starving university student. That was how I launched my real estate investing career. It was totally by mistake. People think I came out of the womb as a real estate expert and they always say, “You can do it, Mike.” They think that I was born with some natural talents and nothing could be further from the truth.Mistakes are humbling lessons along the way. Click To Tweet
I didn’t even have any interest in it until I got that first paycheck, and then I became interested in it and decided, “If I could do this by mistake, what would happen if I did it on purpose?” The only problem was back then I was in my mid-twenties and my ego back in those days, it’s like, “I aced real estate investing. I’m an expert at this.” I quickly quit my job. I also told my parents. My parents were encouraging me to continue to get my second degree before I had the first one paid off. I called them up and said, “You’re wrong. I don’t need anything to fall back on. I’m a real estate investor now.”
On the next couple of deals, I managed to lose almost all of what I made on those first couple of deals. Back then, my ego told me that I did it because I was skillful. What I ended up learning humbly is that I got lucky with my timing and couldn’t duplicate it. As I had managed to lose most of that money, I took what little I had and I started to get mentors. If it weren’t going from being a know-it-all to a learn-it-all, I would not be here having this conversation with you. That was my initial struggle to get into this industry by mistake. It was a good mistake but I definitely had some humbling lessons along the way.
I want to talk about how you then re-entered. I imagine that those lessons formed to you in the second go around. We all have those lessons in life too, where it changes the way that we see the world and the way that we make decisions. Tell us about what you did. Give me a little bit of a timeline on this. You started doing this when you were 23. You had success for a couple of years and then you laid low.
I didn’t even have a success for a couple of years. Originally, when I had a conversation with my mortgage broker, how he explained it is like you buy a property and you put a tenant in there. Over time, your mortgage gets paid off and in the long-term and that’s your retirement. It makes sense. Once I got a taste of that success and I got that paycheck, it was 2.5 years later when I exited that property. I went from having this long-term approach to, “If I want to quit my job, I’ve got to be able to do this every 60 days.” I didn’t know how I was going to do it. I just knew that I didn’t want to keep working at the phone company. I had already told my parents, “I’m not listening to you. I’m not going back to school.” They’re still pissed. Once I started to screw up, I couldn’t go back to the phone company because I burned that bridge. I couldn’t go back to my parents to tell them they were right because being in my mid-twenties, it wasn’t cool. I knew everything, so I had to figure it out.
You ended up getting mentored. That was one ceiling that you broke through. It’s important to break through that ceiling and then learn lessons on the backside of it. You got a mentor and you started doing it the right way. When you started doing it the right way, the second time around, which is what you’re doing now, did you have a slow methodical approach to it now that you had that knowledge or did you go gangbusters like you did the first time?
It was a combination. I started to do some flips but properly. The first one was meant to be a buy and hold. I decide, “I know how to do buy and hold. I know how to do flips.” I neglected to back the property. There were a lot of steps and due diligence that I didn’t do. I didn’t even do due diligence on the first one. It works because I don’t have to do anything. I hired somebody who that’s what he did. He flipped homes. I said, “I’ve got a little bit of money left. What if we do a deal together? I’ll put up the cash. You teach me as we go and we’ll split the paycheck.” That made all the difference.
Over time, if we were to fast forward, if we were having this conversation years ago, back then I was successful financially, but I was working my butt off. I was working 14, 15-hour days. I was workaholic. I wasn’t there for my daughter growing up nearly as much as I should have been and would love to have been. I then started to get smarter and I started to think, “It’s time to start creating passive income and going back to what I started to do, which was buy property and hold them and start getting that cashflow.” I’ve had a lot of different lessons along the way at different points. I’m glad that I had them because they either knock you out of the business or they make you better at what you do. Also, I’m humbler. If every deal worked out, I’d probably be a big jerk now. I needed some of those lessons that knocked me down. Now, I’m very empathetic. When I meet somebody whose passion is to get into real estate investing, I’m very sympathetic. I will take the time to give them some tips and try to help them out and show them what not to do and the things that I did wrong like, “Here’s what not to do.”
That leads us to what you’re doing now. You do have courses that you’re teaching real estate investors. You know how to do it the right way. That’s your transition from being successful to, how do I impact other people? You make that a passion and utilize what you struggled with that made you who you are so that other people don’t struggle either. I imagine that’s something important to you. You don’t want to see anybody having to fight this and have struggles.
I know how difficult it is, especially when you’re first starting out and nobody wants to help you. A lot of people have this mindset of scarcity. They think, “If I teach you, there’s not going to be enough for me.” We’re seeing that for toilet paper now.
The good thing is a lot of people don’t put things into action because they don’t have the right tools and motivation to do it. You can teach people all the time and they won’t take your business, I promise. The other side of it is if you teach them properly, they’ll have the motivation to get started, which is what you’re all about. Our discussion would have been completely different weeks ago. I want to ask you two-fold because I first want to say we’re in Coronavirus and we know that the economy is stumbling along and crippled right now. We know that the anticipation is that it will bounce back pretty quickly because it was so strong beforehand. It’s a matter of everyone being released from jail and we all get to go out, buy things, do things, and be involved. What is your strategy as you’re waiting in this?
The only reason why I’m asking this is because in the future, there’s someone who’s going to be in their own recession, their own situation where they’re looking at this and saying, “Now what do I do? How do I prepare?” What is your strategy as you’re cooped up? Are you deciding, “I can’t look at houses. I’m not going to buy any?” What advice would you be giving to someone who says, “Maybe I have to liquidate my 401(k) or my IRAs because the stock market was going down badly. I’ll liquidate them. Now, what do I do with my money? Should I be investing in real estate?” Let’s take a look at that from the perspective of I’m a not so good market, and then we’ll go back to everything’s great. How does that differ?
What we’re going to see when we come out of this and we get released is there are going to be some people who will be financially in trouble. There’s going to be a lot of jobs lost. There’s going to be a lot of people suffering. For myself, I’m looking at different strategies I’ve used in the past to try and attract some of these people that are going through tough times and come up with a win-win solution for them. Instead of them losing their home to the bank, we can help them have a much softer landing. As somebody who wants a fair bit of real estate myself, maybe we’re purchasing their home at a discount, but in return, we’re putting them into another property that’s more affordable to them or putting them in a rental situation so they get back into ownership. In some cases, maybe even loaning the money to get them over the hump and using the home as collateral.If you don't have any experience or a lot of money, there are many investment strategies that require very little. Click To Tweet
The last thing we want to do is take somebody who’s gone through this lockdown of Coronavirus and then kicking them while they’re down. That’s not what I recommend people do. For people that are sitting at home that maybe aren’t real estate investors, maybe they don’t know if they’re going to have a job when they get out, but they have maybe a passion for it. I’d start educating myself. I’m not necessarily throwing out offers yet but getting the education. We’re gifted. There are a lot of gifts coming from this virus. As bad as the negative side to it, there’s also a positive side. At least for me, I’m gifted with a lot more spare time than I normally have. I’m still learning, building strategies for when this finishes, and building teams to get ready to help with that.
That’s one side. It’s helping the people that are going to be in trouble and creating a win-win and getting paid for it. The other side I see is there was a moratorium on foreclosures, which is great because I don’t think people should be losing their homes under these circumstances. There’s going to be at least a six-month moratorium on foreclosures. Some of the strategies that I use in regular times are going to real estate auctions like tax deed auctions, where people haven’t paid their property taxes for a number of years and also trust deed auctions where they haven’t paid their mortgage. When you have a moratorium on something, and then all of a sudden, after six months, there’s going to be a lot of excess inventory.
If you go to these auctions and you don’t know what you’re doing, you will lose your money. Don’t do that. If you’re going to get yourself educated during this time that you have and get ready for what’s coming down the pipeline, you could want to be helping people in pre-foreclosure before they lose it. Once the bank does have the home, if you can’t help them before, there’s going to be a lot of opportunities there. For me, I am building teams and going to probably do some courses to help people who want to go out there and help other people. That’s what I’m doing.
You’re staging. I use that because my husband is a drag racer. You’re getting up into that tree that lights up and inching your way. One of the things that I’m hearing everybody talk about and that I’ve been talking about as well is this is the perfect time to hone in on your soft and hard skills, the gaps that you have in your knowledge around anything that you’re trying to pursue. The important thing right now is also procrastinating versus preparing. We can procrastinate. If we’re both at the same place now here and someone’s procrastinating saying, “Once we’re out, then I’ll start doing all these things.” The person who’s starting to bite at this and pull through is that much further ahead of everyone. It’s the speed. They already have the acceleration. I love that you’re sharing what you could be doing. This is important too and I want to talk to you about this. It’s what specifically in real estate. It’s so grand to say, “I’m a real estate investor,” but what a lot of people don’t realize is there are 1,000 ways to buy real estate. If you focus on 1,000, you won’t buy any, I promise. What are some things, some strategies or some thought processes around identifying what passion you have as a real estate investor if that’s something that you want to pursue?
The opportunity that’s coming down the pipeline. I never liked the term real estate investor. I like the term problem solver. There’s going to be a whole bunch of people coming out of this with various issues, many of them financial. It’s a good opportunity for people who want to create win-wins and that’s all I ever teach. I’ll never teach somebody to take advantage of a little old lady who doesn’t know the value of her home and leave her. You should never leave people in a bad spot so you can make a paycheck. There are lots of ways to take these people that didn’t lose their homes yet because the government is saying they’re not paying their rent or they’re not paying their mortgage and there’s a moratorium, so they’re not getting foreclosed on. These people are going to come up with an awful lot of stress.
Some of them will not be going back to work, unfortunately. My main priority is to come up with solutions for them, come up with marketing to attract them. Not from a perspective of, “We buy ugly homes,” or from a perspective of, “I can help bail you out of your mess.” That’s my main priority, but also I specialize in tax deeds and foreclosures for many years. What I’ll say for somebody who’s reading this, if you don’t have any of this experience, maybe you’re thinking, “I don’t know. I’d love to get into real estate, but I don’t have a lot of money.” There are a lot of strategies that require little, like something called wholesaling where you put a property under contract and you sell that contract to another investor. There are lots of different ways, but you’re absolutely right. Don’t try to focus on 1,000 different things. Pick one, get good at it and get known for it. After you do that, then progress to the next thing.
My strategy has always been step investing. We buy and hold, pay off the debt, use the cashflow to pay off the first property, then the second, then the third as we accumulate more in a few years and stuff. In any market, I could sell the house at any price and I may have to discount it, but I don’t have a mortgage. It’s all cashflow. Step investing is something that we’ve done, buy and hold. We don’t buy ugly places. We only buy nice places. The other strategy for me is buying subject to, doing wraps, sandwich leases and options. That’s a strategy I’ve taken. The only reason I throw that out is because there are many strategies most people don’t know about. You have to have a mentor in order to make this happen.
A realtor is fine. If you’re going to buy and hold and talking to your mortgage company, that’s fine. If you’re trying to accumulate many homes with less money, then you want to maybe look into some other options other than the traditional way of buying property. We’re talking about you breaking through some ceilings, but we’re also talking specifically about this real estate market, given the timing that we’re putting this out. The funny thing about realtors is not many realtors own a lot of property. I don’t understand that. It’s the product you’re selling. If you were a realtor and you’re in Coronavirus-ville and you’re saying, “Do I procrastinate or I start preparing?” What are some of the things that you would recommend for them to start doing to become problem-solvers for people that are most likely going to be calling them about putting their house on the market if, God forbid, that happens to somebody?
They have a big advantage in that. They already have people calling them or people are coming to them. If they have an investor cap and a realtor cap at the same time, they get a lot more people and monetize it a lot better. Like for example, if I was putting out marketing as an investor, I’m looking for a good deal on the property. If I was also a realtor, if I got to their property and they weren’t willing to sell it to me at the price that made sense for me, I can say, “It doesn’t make sense we buy as an investor, but I have this great marketing program. I’m a realtor and I can help you get your home sold quickly that way.
There’s a little bit of an advantage. I used to be a realtor way back in the old days. What I noticed about the other realtors in my office is most of them would do the bare bones minimum education to keep their license, but they wouldn’t do much more than that. If you are willing to put in a little more effort, it can need a lot more income for you and you can help a lot more people. For me, when you’re definitely not out showing homes in the traditional way, I would take that downtime to start educating yourself on different ways that you could potentially be an investor and help some of these people that are going to be distressed instead of putting it on the MLS. There are going to be a lot of other ways that you can potentially help them.
I see Groundhog Day back from the Great Recession in 2007, ‘08 and ‘09 coming about. I was reading an article. They are now talking about the fact that this could have a negative impact in the real estate market. I’ve not had that outlook. Where do you stand on that as far as values going down and it being this big debacle?
We’re going to see some corrections but not necessarily down though. I was very heavily invested back in 2006, 2007, 2008. Back then, I was invested in Las Vegas and the values have dropped tremendously, but I have to sell. All my properties were cashflowing. I held onto them. What I was finding is the United States became a nation of renters. A lot of people were losing their ownership in their homes and they were turning into renters. That allowed me to raise my rent and I had a much bigger selection of rental pool. It’s always come back and everything is cyclical. Definitely if you have the money, I would be looking to buy and hold, start buying some properties, and start creating passive income.Don't try to focus on 1,000 different things. Pick one, get good at it, get known for it, and then progress to the next thing. Click To Tweet
For some of the markets like New York and California that are expensive and overpriced, they may definitely have a correction downwards. There are other markets. My favorite market is Atlanta and it could benefit from this because when people lose everything they have and they have to rebuild, they’re going to look to lower their cost of living. I sell turnkey properties. Some of the homes in nice areas start at $70,000. In a place like California, that’s not even a down payment.
When you look at some of the stuff going on behind the scenes, in a place like Georgia, the government’s very business-friendly. There are a ton of head offices there. You got Coca Cola, Turner Broadcasting, Delta Airlines, etc. If somebody is in New York City and they lost their job, they’re traumatized because that’s the hardest-hit city right now with the Coronavirus. If you’re looking to lower your cost of living and get a job, a lot of people may end up relocating some of the places that are less expensive. They may correct upwards where some of these markets that are heavily inflated may correct down as people leave.
They may compress this a little bit. We all know that there is a mass exit out of New York even pre-Coronavirus. There was a mass exit of people because of taxes and other things anyway. That’s a good perspective. That’s something that people should consider as they’re going through. As we continue this conversation, I want to talk to you about the advice that you would give to someone who’s thinking about making real estate their side gig, and then ultimately moving into something that’s full-time. You did this as a youngster and you probably didn’t have the 15, 20, 30-year career with the family and all those things to be considered.
That’s part of breaking through glass ceilings. It’s the desire to transition, but then the risk factor associated with that. When you are working with the people that you are now, the people that are trying to learn about real estate and some are saying, “It’s my side gig. That’s what I want.” Others are saying, “It’s my retirement.” Others are saying, “I want it to be my retirement, but how do I make that transition?” What advice do you have for them on how to not be a real estate wannabe? We both know about that where everybody takes the courses and then they don’t do anything. What advice do you have on how to make that transition come to fruition?
There are a few things. A lot of people don’t love what they’re doing. It makes me feel sad to think that people are doing something they’re not passionate about. They fight rush hour traffic to get to an office where they spend eight hours a day doing something that they don’t love and then fight traffic to get home. This may be a wake-up call. Maybe there’s an opportunity to create the new version of you. How do you want to come out after this virus is over? What do you want things to look like? Now’s the time to reinvent yourself. One thing is if real estate is one of your passions or if you want it to be your big gig, real estate can be profitable.
There’s a lot of money in it if you do it right. I would say don’t do trial and error. Get yourself educated and as soon as they open those floodgates, get out there and start putting into practice what you’ve learned. I’m not a big fan of dabbling in anything. Would you go to a surgeon that was dabbling in surgery? Probably not. Everybody should invest in real estate, but not everybody should be a real estate investor. What I mean by that is, for example, I sell turnkey properties and a lot of my clients are doctors, lawyers, engineers, or people that don’t want to learn the ins and outs of real estate. They just want the benefit of the tax benefits rolling real estate, the cashflow, and the security. In times like these, if you’re a lawyer and your office is shut, you still have to have money coming in passively from your properties. That’s okay.
When you don’t have the bandwidth and you take on a whole bunch of different things, and you’re a Mike of all trades and you’re trying to do, “I’m going to flip a home, but I’m also going to run my business,” it doesn’t work. I’d recommend if that’s what you want to do, I’m not saying quit your job right away, but put in a lot of effort as if that was going to be your full-time gig and make that your full-time gig as soon as you can. Don’t quit your job like I did. You’re not going to qualify for mortgages as I learned after I quit. I wouldn’t say that you should dabble in it. I’ll do one deal a year. Either do it well and get good at it so you’re making more money doing that than whatever else you’re doing or get somebody else to do it for you by buying turnkey or go full speed ahead. If that’s your passion, maybe that’s the new version of you that happens after this is all over.
Part of it is it’s a hobby, not a habit. It becomes this little hobby that someone has. If it’s a hobby, you might as well put your money in the stock market but make it a business. It truly is a business. It’s not a hobby. That’s strong advice. I want to say thank you so much for all this time that you shared with us and hearing the basics of it. Someone wants to get in touch with you and they’re interested in what you’re offering and they want to follow you, what is the best way for everyone to do that?
They can go to my website, which is MikeWolfMastery.com or email me at Info@MikeWolfMastery. I’ve also got a YouTube channel with a bunch of free videos. Google YouTube and Mike Wolf Mastery, and that should take you there.
It’s all Mike Wolf Mastery. I want to make sure we get the mastery in there too so that everyone who went in there understands what you’re doing. I know that you have a lot of little quick webinars that people can register to go to and put their toes in it and see if it’s something that they want. I want to encourage everyone who’s reading to take the time to go to a two-hour session to see what Mike has to offer. See what he’s teaching and see if it resonates with you so that you could follow in his footsteps. Let him hand hold you on the way because it’s harder to do it on your own than it is to have someone show you the way. I thank you for that as well. Let me ask you this then. I love asking everybody about a mantra that you live by or a favorite quote that resonates with you, that you might be willing to share that maybe someone will make this their affirmation as well.
My favorite quote of all time is Henry Ford. “Whether you think you can, whether you think you can’t, you’re right.” I’ve been doing this for many years. If somebody would’ve told me when I started years ago, “You’ll be traveling the world, speaking on stages and teaching people,” I would’ve never in a million years imagined this. Believe in yourself, get out there and take little baby steps. You never know what that’s going to lead to. There’s a time where I’d be terrified to speak on a stage and now I love speaking on stage. I never used to like getting in front of a camera to shoot a video. Now I love doing it. Get out of your comfort zone a little bit, believe in yourself and that’s where the magic all happens.
Thank you. On that note, we’re going to leave this episode and I want to say thank you, Mike, for sharing your wisdom with us. I cannot wait for you to have 45 minutes where I’m not asking you questions, but you’re telling people how to get these things done on one of my stages here coming up. I want to say thank you for joining us.
Thanks for having me. It’s great to see you again.
Thank you so much for reading. I want to remind you that there is a new app out there called Goodpods. It’s a great app where all podcasts are now being aggregated into one place. Instead of you going to Apple iTunes or Stitcher or Spotify, you can go to one magic place and find the iTunes that you’re looking for in the interest that you’re doing. You can go in there and type real estate and all of the podcasts will pop up. I want to remind everybody to please grab that app and make sure that you find this show and subscribe. Give us your feedback and your comments and share it with other people in the group as well. I know that Mike will be there. If you put something in there for this particular show, he’d probably respond to you and say yes, no, and comment as well. I want to say thank you so much for reading and we will catch you next time.
About Mike Wolf
Mike Wolf is a self-made freedom lifestyle entrepreneur, seasoned investor, and international speaker. He has been investing in real estate for almost 30 years and has been involved in several other entrepreneurial ventures.
He is a regular contributor in the media with his extensive background in business, entrepreneurship, and real estate. His experience investing in the U.S. as a Canadian has given Mike a unique perspective on taxation and other cross-border investing issues.
Mike not only loves investing in real estate but he loves teaching his students about it as well. He has helped thousands of his students successfully invest in his turnkey properties and as well as teaching others strategy on how to do it themselves.
Mike is passionate about showing people how to successfully invest and grow thriving businesses. Mike has a passion for entrepreneurship and sharing that wisdom with his students.
As a heart-centered entrepreneur his passion is giving back to the entrepreneurial community to help people make informed, educated business decisions to build long term passive income and wealth for themselves and their families.
Mike helps people realize their dreams of creating both time, location, and financial freedom by teaching strategies to achieve passive income. Mike believes that you should love what you do every day and really enjoy life!