171 How Masterminds Can Boost Your Success | Passive Accredited Investor Show | Hard Money Lenders
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Today, the team will be chatting about their biggest takeaways from the Freedom Founders Mastermind.
0:01 – Introduction: “Mastermind Takeaways”
1:23 – Wednesday with Wendy: https://calendly.com/wendysweet/wednesdays-with-wendy?month=2021-09
2:20 – Breaking News
2:36 – Interests rates are low
4:33 – Unemployment continues to drop
7:44 – Everything cost more
8:24 – Freedom Founder Takeaways
12:02 – Alister’s brief background
13:09 – You can get all the information you want but still things are going to change
14:36 – Everyone is talking about inflation no one is talking about deflation
17:14 – Have confidence in your abilities
18:46 – Take a week off every now & then. Disconnect with work.
19:36 – Short Story of Daniel Marcos
26:00 – Where is our country going to right now?
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the “Small Builder” borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and “Ground-up Construction Loans” for investors only in NC, SC, GA, VA, and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Bill Fairman (00:03):
Hi folks. It’s Bill and Jonathan again with Carolina Capital Management. So we were fortunate enough to go to Freedom Founders Mastermind and our show today is going to be our takeaways. And I know you guys are a little worried about the economy and we’ve got some good insights on what’s going on inside of our real estate, businesses and business in general. And we’ll cover that right after this.
Bill Fairman (00:39):
Hello. Once again, Bill and this is Jonathan Davis. Wendy is vacationing and she says she’s trying to join us, but apparently she, where she is ,in the middle of nowhere and she needs a windmill to power her phone. So thank you for joining us on the Passive Credited Investors show. We are Carolina Capital Management. We are lenders for real estate investors in the Southeast. If you’re interested in borrowing money to go to CarolinaHardMoney.com and click on the apply now tab. If you’re a passive investor looking for passive returns, click on the accredited investor tab. Don’t forget to like share subscribe, hit the bell and don’t forget to sign up for Wednesday with Wendy.
Bill Fairman (01:37):
Wendy gives up her Wednesdays for free to anybody that wants to have a discussion with her about real estate issues.
Jonathan Davis (01:45):
Or good stuff. Good stuff too.
Bill Fairman (01:45):
Yeah. I would take this time to talk about real estate, because if you just want to carry out a conversation, you’re wasting your money. We do have a comment and question section of the screen. It’s only a right-hand side or underneath, depending on the platform you’re on. So just leave a question, comment, and we will definitely try to get to that. So usually it’s time, oyu know what? Let’s do a little breaking news. Interest rates are low fake surprise. 10 year treasury was like around 1.13, or something. I mean, it was below 1.2 and that usually follows the 30 year and rates are low. It’s funny though, your mortgage applications are 18% from last month. A lot of that has to do with a lack of inventory for purchase money loans, however, applications specifically for refinance were also down
Jonathan Davis (03:11):
And also, you know, last week we were on with the guys from the, what is it?
Bill Fairman (03:17):
Jonathan Davis (03:18):
Note School. Yeah. Thank you. The available credit index, like, like what you have to bring and show as a borrower is higher than it has been in quite some time.
Bill Fairman (03:33):
Yeah, it’s already qualified for those really low rates. And that’s usually what happens when it gets to the point where it’s almost free money. You have to be. And we like to use this old bank adage. “Oh, I can’t give you a loan. You actually need the money. If you did need the money, ,then we’d be happy to lend it to you.” But they’re only doing these really low interest rate loans to the very best customers or the best borrowers. Now, fortunately we have the non-qualified loans that people can get into, but then you’re not going to get nearly the savings and you’re probably already at a low interest rate when it comes to refinance. If you have to have cash out and it might be a good opportunity for you, if it still fits within your, whatever it was you were looking to do, there could be a really good alternative for you.
Jonathan Davis (04:31):
What else is breaking news?
Bill Fairman (04:32):
We had the dropping first time and then unemployment. It continues to drop the last three weeks in a row it’s been dropping. So that’s good.
Jonathan Davis (04:41):
Bill Fairman (04:42):
What’s really concerning are the consumer price index and the,
Jonathan Davis (04:48):
They’re going down, right
Bill Fairman (04:52):
No. And the, what’s the other one? It’s the wholesale, folks. Th producers. So producers price index. So consumer price index was actually only up a 0.1% from last month. It’s still up 6%.
Jonathan Davis (05:21):
Overall from the year before.
Bill Fairman (05:24):
The producer price index was expected to go up about, I think it was 0.7%, but it went up 6. So it was way off expectations.
Jonathan Davis (05:41):
Oh my gosh.
Bill Fairman (05:42):
Whenn you take out the, the core inflation or the core, which is energy and food, it was pretty low.
Jonathan Davis (05:53):
Bill Fairman (05:53):
But guess what? We all still have to pay for energy and food. You can’t get around that.
Jonathan Davis (05:58):
Jonathan Davis (05:59):
So, you know, your inflation numbers are going through the roof or 7, 8%.
Bill Fairman (06:08):
Some argue higher.
Bill Fairman (06:09):
Yeah. And some of it’s slowing down. Lumber prices have plummeted from when we were,
Jonathan Davis (06:16):
Still up from last year. Yeah. Minute from the high, about 4 months ago
Bill Fairman (06:21):
When we were complaining about it. Okay. They have plummeted from the, the time that I’ve bought wood till now, when I don’t need it, that’s typically the way it is.
Jonathan Davis (06:34):
Bill Fairman (06:35):
Just anecdotally, by the way, everything is high. I bought three foot, one inch diameter pipes that were galvanized. I bought three arms, you know, where you turn them, I can’t think what they call them, the arm. And then I bought, three, one inch pieces of pipe. They call it a nipple.
Jonathan Davis (07:02):
Can you say that on here?
Jonathan Davis (07:04):
But it’s only one inch. And then it goes into the plate, it’s called a floor plate. That’s bolted into whatever flat paper place you need to put. Those items. And again, three, one inch, thirtysix inch, and then the arms and the plates $115.
Jonathan Davis (07:30):
Bill Fairman (07:30):
I mean, that’s something that I would have expected not to pay more than $50, or if I’m, anyway, it’s ridiculous, how everything cost.
Jonathan Davis (07:37):
So everything cost more, inflation is up
Bill Fairman (07:46):
When we get back to why people are putting all their money into the stock market is because again, if you’re in the bond market and you’re only making
Jonathan Davis (07:57):
1%, 2%, you’re not outpacing any level of inflation.
Bill Fairman (08:02):
And by the way, I’m going to get to why the bond market is still doing so well. Later on in the show.
Jonathan Davis (08:10):
Bar market’s a safe,
Bill Fairman (08:14):
Jonathan Davis (08:16):
Safe place to be.
Bill Fairman (08:18):
Depends on where your money was and where it’s coming from.
Jonathan Davis (08:21):
Bill Fairman (08:22):
Jonathan Davis (08:23):
Bill Fairman (08:24):
So we’re going to talk about our takeaways. We were fortunate enough to be members of freedom founders and David always does a great job of bringing in keynote speakers that have a lot of, not just real world experience, but experience from outside of the country as well. Plus, we’re there at this meeting that we are surrounded by other real estate investors that have a high level of competency in their particular field and market and geography. And we’re blessed to be around those folks as well. And we learned from each other. Did you have anything you wanted to, you have a takeaway that you might want to share or you want me to just get into it? Maybe you can think of some stuff.
Jonathan Davis (09:19):
Well, no. I mean, you know, they brought in and I messed up his last name after, was it Allister?
Bill Fairman (09:26):
Jonathan Davis (09:26):
Okay. Allister MacDonald. Just the, the knowledge base that he has. So this gentlemen lived in Zimbabwe, was it Zimbabwe? It was Zimbabwe. Where they had the hyperinflation. So he went through that and it was great to hear from someone who had firsthand account knowledge of what they have. And I’m not saying we’re in hyperinflation, I’m not saying that
Bill Fairman (09:53):
That 135% inflation.
Jonathan Davis (09:56):
One of the guys we work with, Bill Mann, he tells me, he keeps a couple of billion dollar bills from Zimbabwe as bookmarks, as a reminder of what can happen.
Bill Fairman (10:16):
His parents owned a business in Zimbabwe and of course he grew up working for his dad at the time and they would have to pay their employees twice in a day because the value of the currency would go up that high in a day. They’d have to pay him at lunch and then before they left.
Jonathan Davis (10:41):
And you know, like they were all saying like, when you ordered food, you didn’t pay until, you know, you couldn’t prepay for the food. You’d have to wait until they got it. Because by the time it got from the kitchen to you, it’s probably already increased in price.
Bill Fairman (10:55):
I mean, we were giggling about this, but that’s what happens in a lot of these we’ll call them not as stable governments as we have here in the west. Right?
Jonathan Davis (11:05):
Yeah. Well the biggest takeaway, you know, one of the things that I think really personifies Allister’s brilliance is his ability to understand the mechanisms of people.
Bill Fairman (11:20):
Jonathan Davis (11:21):
Because we can all talk inflationary numbers, we can talk hyperinflation, deflation, you know, whatever percentages we want, but it all boils down to the human element. And if you can understand people and understand why people do what they do, then you can start to hedge yourself against, big events that can change like hyperinflation or, or deflation. I mean, that’s one of the things that he talked was, you know, we’re all talking to, you know, everyone’s talking about inflation. No, one’s talking about deflation
Bill Fairman (12:00):
Right. So a little background on Allister, when he was 21, he was hired by the National Geographic to work with one of their big article writers for National Geographic. And they were going to map this river from its beginning to its end. And, you know, we didn’t have these commercial satellite available that you could just take pictures at the time. Somebody actually had to, you know, ride the river and map it out. And there were sections of this river in Zimbabwe that no one had ever been to s it was never mapped out. And, you know, people were asking him, how could you possibly have the courage to go to the head of this river and ride it all the way down and go through these areas that no one had ever been to and have never met? Aren’t you afraid of the unknown? He goes, well, I have the skills to navigate the unknown when it happens. And that was one of my takeaways is that you can get in any business or any endeavor. You can get all the information you want, but there’s always things that are going to change. When you look at these Navy seals and they plan and plan and plan. The first thing they will tell you is that the plan is thrown out the window. As soon as the first shots fired.
Jonathan Davis (13:28):
Bill Fairman (13:29):
As it changes, you cannot plan for your opponent’s reaction. You can’t plan for the unexpected.
Jonathan Davis (13:42):
Yep. And you brought up a good point. And one of the things that I really hooked into was, when he was saying, cause we all talk about information and you know, I don’t know if you’re going to touch on that, but we live in a world of just, you know, information, information overload. And one of the things that he, yeah. One of the things that he was saying is information at his truest form is surprising, or it has to have some element of surprise, right. Cause if it’s known, it’s not information it’s just, it’s the known. And if it does it and it’s not applicable, then it’s not information. So we surround ourselves with all these different channels of influxes of information coming in and out. And, you know, none of it’s surprising, you know, and that’s one of the things that we just said like, you know, everyone’s talking about inflation, no one’s talking about deflation. You know, that would be indeed a surprise.
Bill Fairman (14:44):
Jonathan Davis (14:46):
You know, if things keep inflating or, you know, we have inflation that, I don’t know if that’s really information, we already know what’s happening. Inflation is not as higher now than it was two years ago. Who cares? You know, like you can’t go back two years. We are where we are.
Bill Fairman (15:05):
So and what would happen in the deep deflation of assets would be, so we had this particular scenario, everything costs more and more and more, and then people stopped buying it because you’re only going to purchase stuff you have to have. Not stuff you want that eventually you’re going to have assets that aren’t in necessity that are going to start going down in value because you don’t have a market for it and then that will translate into other parts of the economy.
Jonathan Davis (15:37):
You would imagine when that happens, it would translate into higher interest rates.
Bill Fairman (15:42):
Well, the problem with governments are if interest rates go up, then the debt that they have will cost more
Jonathan Davis (15:49):
Exactly. So that’s the whole point, like, cause you know, one of the whole takeaways or one of the focal points, I guess, of the last weekend was the seventies.
Bill Fairman (15:58):
Jonathan Davis (15:58):
Where we had that jump in interest rates, we had that deflation and, you know, are we heading there now?
Bill Fairman (16:09):
And oh, by the way, the Saturday evening, we had a themed dinner and we all had to get it in our best seventies outfits, which was not a very good look on most of us.
Jonathan Davis (16:24):
To jump back to what we were saying though, I mean, we try to predict what’s going to happen. We don’t know. I imagine though, our government and the powers that be were, are not going to increase rates because that adversely affects our deficits. So where do head? Do we go into negative interest rates? Do we take the course of Europe?
Bill Fairman (16:54):
You see, that’s also been tried and failed, but then I don’t put it past our government to try stuff that everybody else fails because we’re different. Anyway, moving on. Let me see, is that horse still?
Jonathan Davis (17:07):
I have to.
Bill Fairman (17:07):
Talk about navigating, whatever comes up. That’s what the Alister was talking about. That you need to have the confidence in your abilities to just navigate what comes up in front of you. Are you going to make the right decision every time? No. But don’t have a fear of making the wrong decision, the wrong decision, own it and move on, learn from it.
Jonathan Davis (17:33):
And to build on that, I don’t know if it’s original to him or whoever said it. If you actually stop and think about this, every person who’s watching this video, us here, we have read more books than Socrates and Plato. We have had more worldly experiences than Socrates and Plato. Trust yourself. You’ve gotten yourself here and you have a lot of experience.
Bill Fairman (18:00):
Yes. Believe in yourself. Sit down and think about the accomplishments that you’ve had since, well say, high school and where you are now. Take heat in the fact that you’re not a loser because you’ve made it this far. Or I can go into.
Jonathan Davis (18:22):
If Wendy was here. I think she would probably allude to some fact of you being a loser.
Bill Fairman (18:27):
Jonathan Davis (18:28):
I’m sure there’s some comment that she would have.
Bill Fairman (18:30):
I’m gonna quote Richard Pryor, and I’m going to use the rated G version of Richard Pryor.
Jonathan Davis (18:38):
Bill Fairman (18:38):
“Did you listen to old folks, old folks? Ain’t no fools. You don’t get to be old for being no fool.” All right. So one of the things that Allister also mentioned was once you get into a particular position in life, now when you’re starting your business off, it’s very hard to do this, but once you get to a position where you can do this, and you’re not the center of attention anymore, you need to take a week off every quarter. And what I mean by a week off, you get completely disconnected. You don’t look at your email, you don’t do texts, try and set up a phone that’s only textable by your family, if you’re needed in an emergency or some kind of personal email where it’s not about work. You want to disconnect. That’s the only way you’re going to refresh your batteries.Let’s talk about Daniel Marcos, he was another speaker.
Bill Fairman (19:43):
Daniel is from Mexico and he graduated from university of Monterrey. Actually, it was Monterrey Technical Institute and he got a degree in finance. His dad. Now, this is not a rags to riches story because his dad was a, he had a PhD in economics as well. So he was no slouch either, but when he was a very young boy, probably seven, eight years old, the family went to visit an uncle in Texas and they were there for Christmas holiday. Christmas day, dad comes down in a suit when everybody else was opening presents. And he says, where are you going, dad? Why aren’t you in a suit? And he says, I have to go back to Mexico. I have a client that I have to take care of an issue. And of course, you know, being a kid, he’s crying that dad’s not going to be there on Christmas day, asked his mom, why does dad have to go and our uncles are here? Well, your uncles are entrepreneurs. They own their own business. They don’t have to handle claims on Christmas day. So he thought right then that day, that’s what I’m going to do when I grow up, I’m going to open a business. So when he got out of school, he was offered a position in Hong Kong in ’98 when they were signing the treaty over from England. And he was essentially the liaison between Mexico and Hong Kong folks financial institutions. So he did that for a couple of years and he hated it because again, he was working for someone, he was not an entrepreneur. He has an entrepreneurial spirit. So he quit his job, moved back to Mexico and started a, and I’ll just call it an E-Trade kind of a business in Latin America. So he was the first one. He said, back in those days, if you just had a.com at the end of your business, you get, anybody will give you money to start this thing up.
Jonathan Davis (21:51):
Wouldn’t you be E-Trade if you speak in Spanish?
Bill Fairman (21:54):
All right, smart Alec. I don’t speak Spanish. So I wouldn’t know.
Bill Fairman (21:58):
Okay, so he set this company up, he had Chase, Lehman, Goldman, all these people were backing him. So he had tons of investment to get this thing off the road or off the ground rather. And he ended up merging with a Brazilian company in about a year and then a final piece to that is that he ended up selling the business to the largest financial institution in Argentina for $70 million. Now he was 25 years old when this happened and he sold the business to a 24 year old. And this was at the end of almost 2000. Wasn’t quite 2000. So he sold it at the peak. And then a few months later you had the.com crash. And the 24 year old was not real happy with his purchase. Anyway, so he took his money, was able to get a visa, moved his family to Austin, Texas, and started a mortgage company and they were doing quite well, they had offices and of it throughout Texas and California, and a couple other states and 120 employees. And then in July of 2007, he gets a call from his bank, happens to be a JP Morgan chase and said, “You know, those loans that you just closed yesterday, we’re not funding them. And all those loans in your pipeline, and we’re not funding those either.” So he had to shut that business down. And of course that was the start of the mortgage collapse. He had to shut that business down. And he had several million dollars in his bank account that converted to minus a million dollars. He was now a million dollars in debt because he had to pay to get out of the leases and whatnot and worse than that, he had to go back and tell his wife no longer do we have a couple of million in the bank. We owe a million dollars and I’ve had to shut the business down. And our visa was attached to us owning the business here. So now we have to be back in Mexico.
Jonathan Davis (24:13):
Oh Geez. Yeah. Big change. I mean, it was for a lot of people.
Bill Fairman (24:17):
Kind of rags to riches anyway. So after that, and I’m not going to go through the entire story.
Jonathan Davis (24:25):
I’m not sure, I think you just went to the entire story.
Bill Fairman (24:25):
Well I mean, it goes on for a little bit longer, but he is partnered with, I can’t believe I can’t remember his name. Verne Harnish, the author of Scaling Up. So he now has a business where he consults with different businesses on how to scale up property and properly. And the thing that stuck out to me the most was if you want a nice lifestyle business that’s going to have a nice profit margin for you and your family, then you try to stay within the 12 to 15 employees, you get any bigger than that. And your only option is to set your company up or scale i to sell to somebody and get completely out of it
Jonathan Davis (25:15):
And only if you can keep the profit margins where they need to be.
Bill Fairman (25:20):
Well, the whole point of going above that 12 to 15 is so you can scale it to sell it. And otherwise, if you’re just trying to grow that business and just grow it and grow it, you ended up doing what we all talk about anyway, is that you’re just going to create this machine that constantly needs to be fed and your margins are going to continue to go down. You’re going to have, you’re going to do more and more work, and you’re going to get less and less profit for it. So that magic number is between 12 and 15,
Jonathan Davis (25:53):
Correct. Yeah. If you want to keep the business and just keep the lifestyle,
Bill Fairman (25:56):
And I know we’re getting close to time, but I have to tell you this right here. And this is where we have issues with, you know, where is our country going right now? You know, we got, we’re trying to compete with China. People are saying that China is gonna win. What’s going on with taxes and all this kind of stuff we talked about this earlier with the bond market. Part of the reason the bond market is still doing well, even though people are moving to stocks because the bond mark doesn’t pay anything is that the wealthy people in other countries are always going to bet on America. So what Daniel was telling us is that there’s a wealthy people all over the country, or all over the world that are in countries where, you know, they might lose all their wealth and they’re willing to spend, in this case, you had to spend 20% of your wealth just to move your money out of the country.
Bill Fairman (27:00):
And he said, why would you spend 20% just to move it somewhere else? Well, I’d rather have 80% of my money than a hundred percent of it being gone at some point. Again, you’re talking about countries that don’t have very stable governments. Things changed a lot. And if all I’m worried about is not losing my principal, then I’m going to put it in US bond market where I’m not gonna make any money, but I’m not gonna lose it. Now, in most people’s mind, if you’re not keeping up with inflation, you’re losing it, but I’d rather lose it at, you know, 3, 4, 5% and than lose all of it.
Jonathan Davis (27:38):
Correct. Yeah. You know, you said something, people are always going to bet on US to succeed. You know, when someone, you know, I’m just, this is just my opinion. When someone tells me something will always happen or will never happen. I usually bet against that.
Bill Fairman (27:55):
Okay. Let’s put it this way. The vast majority of people are going to bed as it is the most days.
Speaker 3 (28:03):
Let’s talk about investors. When people believe something will always or will never happen, it’ll usually leaves them blind to,
Bill Fairman (28:13):
That’s true. Now, lastly on the battle with China and he pointed out something that really made a lot of sense. And I didn’t think about this. China is doing very well because they are bribing most of the countries. For example, they put a port in Sri Lanka and they, you know, had terms with Sri Lanka that they could not actually follow through. But so they eventually repossessed the port. Of course so now there’s a little piece of China in Sri Lanka because they repossessed it and they still are charging them money because they’re behind in their payments. So basically what he is saying is that beyond what you think of our government, when it changes hands and people do silly things, because most of the politicians have never had businesses in their first adversities. But America and its core has values that people want to aspire to. And for the most part, we’re not bribing other countries to hang with us. We’re giving them an opportunity to better themselves.
Speaker 3 (29:30):
We’re better at silencing it or keeping it quiet, or we’re not doing it
Bill Fairman (29:34):
I’m not saying we haven’t made any mistakes, but if you look around the world, who do you want to hit your wagon to? What core values someone going to have
Jonathan Davis (29:47):
You want a core value of, like the quote American dream, like where you can aspire to better yourself, better your position in life, better your family, I will subscribe to that all day long.
Bill Fairman (30:02):
Yeah. So, uh, I came out of that meeting with a little bit more of a smile because, you know, you get pounded to death with what’s going on in the news. I try to stay away from the news, but I do watch the business channel cause I want to see what’s going on with the markets, but you always get a little bit of commentary on our governments. And I’m not as concerned. Again, you go back to you can’t control what’s not controllable by you so just navigate it as it comes. And for the most part the U S is still going to be the best bet in the world economy.
Jonathan Davis (30:43):
What you can control is what you do and how you react. Those two things.
Bill Fairman (30:48):
And the folks that you want to be around.
Jonathan Davis (30:51):
Bill Fairman (30:53):
And when you want to do it
Jonathan Davis (30:55):
And maybe how but may not always, I don’t know.
Bill Fairman (30:59):
I hope this was helpful. You got anything else to add?
Jonathan Davis (31:02):
No. I was just gonna say, you know, I do what I have to do and sometimes I get to do what I want to do, but most of the time I do what I have to,
Bill Fairman (31:09):
But we’re all striving to do what we want when we want and who we want to do with. All right, folks. Thanks again for joining us on the Passive Accredited Investor show. We are Carolina Capital Management. We are lenders for real estate investors in the Southeast. If you’re interested in borrowing money, go to CarolinaHardMoney.com. Click on the apply now tab. If you’re a passive investor, looking for passive returns, click on the accredited investor tab. Don’t forget to like share, subscribe, hit the bell and don’t forget to sign up for Wednesday with Wendy. We enjoyed it. We will see you guys next week. Have a great afternoon.