PLP-085 Creative Investing And Why Reputation Is Everything

PLP 85 | Creative Investing
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PLP 85 | Creative Investing

 

Quest Trust Expo is one of the biggest gathering of self-directed IRA investors in the country where they learn what is needed in an ever-changing economy. Keith Baker shares his thoughts and takeaways from the Quest Self-Directed Expo – the biggest of which are creative investing and why reputation is everything. He also talks about some tales of woe he heard from fellow investors and meeting some people who are looking to deploy their capital or looking to fund and find deals.

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Creative Investing And Why Reputation Is Everything

Thoughts And Ideas Taken From The Quest EXPO 2019

I don’t know about you but I, for one, am getting ready for the next downturn. I’m not doing anything drastic, but mentally getting prepared and going to start collecting the acorns and the cash. Because when there’s blood in the streets and the banks tighten up, it will be a private lenders’ paradise. It will be private lenders who provide the capital to keep the real estate market turning ahead. That’s why I want to build this tribe of lenders. I want to thank you for being a part of that tribe and for reading. Let’s go ahead and get down into the brass tacks on this episode. I wanted to give you my thoughts on the Quest Trust Company Self-Directed IRA Expo.

Quest Trust Company Self-Directed IRA Expo

The gang over at Quest stepped up and outdid themselves again this 2019. I’d like to thank everyone over there at Quest from Quincy, Nathan, Nate, Juan, Rebecca, Haley, Keaton. Most of all I want to send a big thank you to Anne Marie for having me speak on the Private Money Panel and for letting me be a part of such a truly great and wonderful event. Thank you. I’m already looking forward to the 2020’s Expo and that’s why I wanted to break my programming schedule and go ahead and talk about it. It was still on my mind and I’m still a little giddy about conferences and the expos. I’m giddy about it in what I learned, who I met and a lot of cool stuff.

Let me go ahead and dive right into that and I’ve met a lot of very interesting people. I call it brand newbies all the way to who barely have any capital or starting off and they’re investing in real estate investing career. I met a few newly-made millionaires looking for options, where to park some money and very interesting people from all over the country. They’re hard money lenders, lawyers and IRA specialists. Everyone at Quest is pretty much a specialist and they specialize in a certain area so that your questions can get answered very quickly. There were also gurus and coaches, typical seminar expo stuff, but there are a ton of people like you and me.

It was about a thousand attendees. I’m not sure how many vendors, sponsors and speakers, but it was another great expo. I spent as much time as I could watching it at the table and at the booth. Probably much to my detriment or the podcast’s detriment, but it was that how good it was. It was as long as the three-day weekend, but it was cool. There were a ton of people like you and me and those of us who are looking for more from our investments and retirement accounts. You’ve got to see that you could extrapolate that to life in general for we are the seekers and hopefully one day we’ll be the knowers.

Some of the classic mistakes of investors is trusting the borrower with the value of the property. Click To Tweet

Tales Of Woe

I did feel like there were a lot of kindred spirits there with many of the attendees and the vendors. This is why we drag our hungover sales down to the ballroom to listen, to learn, to meet, and to increase our network and therefore our net worth with these types of events. There is no disappointment there. I unfortunately did hear several tales of woe from people who knew enough but didn’t know what they were doing. They made some mistakes that I rail against and preach against because I’ve made those same mistakes too. Hopefully, I was able to give these people a little bit of comfort and some empathy for their mistakes. You don’t need to beat yourself up too much, just enough to where you don’t do it again, but after that you should stop it.

Some of the classic mistakes were trusting the borrower in regards to the value of the property. Looking at only the comps that they have cherry-picked and not running their own or getting their own CMA, Competitive Market Analysis or having them get some type of comp from the MLS, active or not active, sold within the last few months, preferably in the last month is even better. They trusted. They got burned. Some people didn’t use their attorney to draft the documents and in some cases, they recycled documents, which I rail against and because I’ve made a mistake and it’s one you feel pretty dumb when it happens. That’s why I say don’t do it. Set that in your head.

It’s not negotiable and some of the other telltale mistakes are the ones you see a lot. They didn’t get a lender’s policy title, insurance policy and there was somebody contested. An heir came out of the woodwork or in some cases people rather than using the title company and sending money only to a title company, they sent wires or checks or certified checks, cashier’s checks directly to the borrower, which you never want to do. Heard some of those stories and hopefully the people that told them to me, I want to thank you for sharing your stories with me and don’t feel too bad. You’re going to be better the next time. Shoot me an email before you do a loan and let me have a quick once over because I can spend five minutes and save a lot of heartaches.

Tales of woe, you get them and everyone thinks the sky is falling, the recession is in the bag, which it seems logical that that’s where we’re going. I made the joke of the next recession starting in the next many months and everyone agreed. Everyone knows it’s coming, we just don’t know when. The signs start to show up. I thought that was very interesting. This makes flippers nervous, landlords a little nervous sometimes and newbies nervous, but it makes private lenders like me very excited. I’m gathering my acorns and getting ready for that. Another takeaway was that opportunity still exists. There’s still very much opportunity out there.

PLP 85 | Creative Investing

 

Talks From Great Speakers

I’ve met a lot of people looking to deploy their capital and met a lot of people looking to fund their deals or finding deals or projects. People from your typical single-family flipper to people that do commercial land development or buy old buildings and convert them into a new use. There was plenty of deals and plenty of cash out there for it, you’ve got to go to these events and network for it and meet people. One of the talks that Quincy Long gave was on the inherited Roth IRA, which I told Nate, I said, “I’m going to grab that audio and that’s going to be a full episode on the show because Quincy’s a very smart man and he’s a big fan of this. There’s a good reason why,” but I’m going to let him explain why.

You can get extremely creative and several panels with the attorneys that were mixing self-directed IRA accounts with entities and not only 401(k)s, IRAs, LLCs and it was over my pay grade to say the least. The big takeaway was you can get very creative, legally, ethically, morally, and you can give your grandkids a start in their financial life with the inherited Roth IRA. Pay attention, that’ll be coming soon. There are a lot of opportunities out there, go find it and sniff it out. Not everything’s going to work out. Kids coming up to the huge takeaways, do the due diligence and do the due right there.

That’s the new phrase, do the due, and it came out on every panel. It came out on every talk and I understand there were a couple of a few sales pitches from the stage, but you’ve got to do the due diligence. That comes back into pillar number one for the show, never trust, always verify and that made me feel good. In fact, one guy stopped and asked if he could take a picture of the back of my shirt where it says, “Never trust, always verify, PrivateLenderPodcast.com.” I was happy to oblige him and let him have a photo and it was weird. Maybe a little uncomfortable, but it’s cool at the same time. There were fifteen seconds of fame for the weekend.

There were amazing speakers up there with Quincy, John Hyre and Jeff Watson. Those three lawyers right there you want to listen to. Quincy doesn’t practice, John and Jeff do. It’s a wealth of knowledge and experience from those two gentlemen. One of the things Jeff said, he kept pounding, “Make consistent contributions to your retirement accounts every month, every paycheck consistent because that consistency will pay you dividends in the long run.” There’s nothing new with that, but it is true that we often forget why we open up the accounts, we start working with them, and we stopped contributing to it. The government allows either $5,000, $6,000 or $7,000 a year, depending on your age and your income status and that benefits Quest because of the more accounts that they get, the more fees. I’m totally okay with that. There are some interesting and creative things out there that you can do and Quest is at the forefront of teaching people how to do it. Contribute, but also do plant seeds now so that you can let them grow and you’ll have a shade tree in a few years and do the work now, put in the effort now to make sure your future is secure.

Reputation is everything. It takes a lifetime to earn and only a second to burn and to lose it. Click To Tweet

There was a lot of talk about planting your seeds but the real big takeaway for me and not just on the education side but more on the speaker side is that reputation is everything. It takes a lifetime to earn and only a second to burn and to lose it. I’ve heard this and known this my whole life, but it really struck me over the weekend and it hit me in between the eyes because I met and saw the remains of people who had been taken advantage of and it’s demoralizing these people. They should have known better, whatever. You can make arguments for both sides. I hate seeing people getting taken advantage although they don’t know any better.

Reputation Is Everything

In fact, I’m not going to name any names and I’m not pointing any fingers. I want to take a nice 30,000-foot view with this because I feel like I need to go on the record with this. I don’t want to bring anybody down. I understand this is a bummer, but I do want to go on the record. I’ve heard a ton of rumors during the expo from people, vendors, operators, investors, lenders, and events involving human beings. There are a ton of rumors floating about. Some of it was about the stock market and, “This is going to happen. That’s going to happen.” There were some rumors about someone basically that I’ve had on the show. They apparently had an investment that did not turn out as anticipated or I’m not sure what the chain of events is, but the bottom line is the rumors are this person is now being sued. He has lawsuits against him.

This is somebody I’ve had on the show. Somebody I looked up to. I still do, I think, but immediately I’m saddened by that, but also at the same time sadness is an emotion. Take the emotion out of it was the logical thing. There are three sides to every story and in the case of a husband and wife, there’s his, hers, and the truth. We’re going somewhere in between as the truth. I like to look at it like that. I’m not condemning this person. I haven’t seen, I haven’t researched to confirm whether or not these lawsuits have actually been filed in the county courthouse. I can neither confirm nor dispel these rumors. I’m not saying anyone’s name because I don’t want to further them on because it doesn’t matter if the horror stories are true or they’re not.

Reputation is everything and that’s the lesson here because you don’t screw people over. It always comes back to bite you in the ass, but rumors are already out there doing the damage regardless of what happened. Let’s say something bad did happen, but it has nothing to do with lawsuits or it doesn’t matter. There’s tarnish on the act, on the person, on their credibility, on the personality, and on their integrity. As someone who I aspired, I made no bones about it to be an online educator and I take this to heart because I have to be mindful about who I bring onto the show. I want to bring people on that have something that’s interesting to say or perhaps a product or service that the Private Lender Nation could actually find useful. I have to keep what I call the crispy clean reputation.

PLP 85 | Creative Investing

 

I sure don’t want to bring a fox into the henhouse to get all the eggs but it’s apparent that I felt prior to myself on verifying things. Not even I can keep things like this from happening or being affected by it and this is happening, but no matter how much verification I do, sometimes things do happen, things go south. It’s things like that ruin reputations or at least they become roadblocks. They knock you off-course for a little time. I don’t know what happened, but it’s my opinion that when things like this do happen that immediate insincere communication is the only thing that can stop bad feelings and the rumor mill, especially from starting up. That communication has to come in real-time and long before any crap goes down.

If you borrow somebody’s money, whether it be mine or friends, relatives, a bank or from a hard money lender, it’s my belief that immediate, accurate, real-time and sincere communication is the only way to deal with mistakes and losses or downturns or unfortunate events. I’ll tell you this because over the next few episodes I’ll be having guests and providing some affiliate links to some of those guests. What this means is I will have links to other people’s products or services and I will receive compensation, a commission, or an affiliate fee for the purchase that you make. I want to put it out there and tell you out first, this is how it works. If you click on a link, you’re either going to buy something, you’re going to give up your money, or perhaps some information, an email address and name or number or whatever. That’s how this online world works and it’s taken me the last year-and-a-half to come to the table and start to learn the rules that are set out so I can play the game.

I don’t want to be one of those cheesy people that send out an email every day with other different affiliate links. Don’t worry, you’re not going to get that. I only want to bring people on that actually help. I have a service that may help the Lender Nation. I’m probably going to start at an email address so that I can get some feedback about that as we move forward. I want to tell you that, “Yes, of course.” To me, it goes without saying, “You have my word that I’m going to do everything I can.” The people that come onto the show and not allow a scammer or charlatan to get in front of the Lender Nation so that they can feel safe about the people I bring around. You can feel like I’m not bringing some Joe Shmoe off the streets and saying, “I can make you rich and sell my product.” I’m not doing that. However, at the same time, I can’t beg you, ask you, and require you to please do the due diligence. Do your own due diligence on anybody that I promote or allow to pitch or sell their wares. This goes from when you’re looking at members for your lending team, like attorneys, appraisers, brokers, inspectors, note servicing companies, borrowers, operators, fund managers and so on and so forth. I’m going to try to bring people on that I believe are out doing the right thing and doing the good thing.

PLP 85 | Creative InvestingUnfortunately, sometimes crap happens and there’s a risk in every investment. There’s risk in driving down the freeway to go to your office or home every day. What I’m asking is, can we agree and let’s both do our part for both our sakes and do the due diligence? Never trust, always verify. I’m going to have to do a whole episode on that as my new hashtag, it’s copywriter, do something crazy like that, but I don’t know. We’ll see what goes on. That’s the big takeaway, especially now the market is frothy, the economy’s frothy. There are “deals” that are being bought and sold that you look and people are already losing money. They already lost money on the buy even if it’s cashflowing for the next several months. They’re ultimately going to lose money because they’re buying too high.

 

From that, do the due diligence. Learn as much as you can. I promise I’m going to bring people on that I think can help and if you disagree, I certainly want to hear about that. If one of them screws you over, I want to hear about that because I feel it’d be up to me to step in and help if I can to send a message quickly and clearly to the offender. There are three sides to every story. That’s the framework I’m taking away from what I thought was an amazing Quest Expo. That’s all I have for now and I do want to thank you for hanging in there and reading. Thank you so much. If you could do me a big favor and leave an honest rating and review over at iTunes, Google Podcast or whatever platform you use. The more ratings and reviews it gets, it helps put the episodes to more people like you and me. We want to take control of our money and our future. I’m asking you to help me out and get the word out there so we can all get our slice. Also please connect with me on social media, Facebook, Instagram, LinkedIn, BiggerPockets, all those links can be found at a PrivateLenderPodcast.com.

I appreciate you reading. I want to thank you for your time and consideration. Please keep reaching out to me via email or Facebook Messenger. I appreciate it. I do appreciate all the feedback I get. Even if I haven’t responded to you, please keep it coming. I want to thank everyone with whom I spoke. I learned a ton that I want to start writing things down before I forget them. I’ll write a bunch of things down. Besides health, happiness and self-awareness, I wish you all happy and prosperous private lending. We’ll see you in the next episode.

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About the author, Keith Baker

My ultimate goal is to create an economy for Real Estate (and other) Investors where banks are no longer needed. An economy where every day people look to each other for leverage and support. During the day I am an insurance adjuster for the oil field, where I handle millions of dollars of other people's money (OPM), and by night I invest in Real Estate and host this podcast. I hope you have an excellent experience and find real value within this website and the Private Lender Podcast. Please leave comments or submit your questions on the Contact Page.

I wish you prosperous, safe and happy lending and investing!

Thanks for listening

-k

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