Rudolph the red nosed reindeer can teach real estate investors an important truth about investing. In the classic holiday cartoon, Rudolph is initially concerned about his red nose and he assumes he is the only misfit around. Then he meets an elf who wants to be a dentist and along with a few other unique characters. They set out on a journey that ends with discovering an entire island of misfits. How does that story relate to real estate? The best real estate deals are oftentimes the misfits. And many are blind to the fact that these misfits exist. But once you have been introduced to this world of real estate misfits, you discover that there are more of these out there than you would have ever imagined. Check out this video which describes this concept on much more detail, as well as a VERY important business lesson that is rarely talked about:
If you don't know anything about the story of Rudolph the Red-Nosed Reindeer, first of all I'd go check out that little cartoon. It's a children's classic. In the movie, Rudolph thinks he is so unique and different because he has a red nose. As the movie progresses, he goes on a journey and he ends up discovering an island of misfits. All of a sudden he discovers that he's not the only misfit out there, that there are a ton of misfit toys.
How it Relates to Real Estate
Rudolph can teach you something here. I get this question all the time from people that are watching my videos or reading my book. They say, "Phil, who in their right mind would ever do a creative real estate investing deal, I would never. I own a home and I would never do that. I would never let you just buy my house really cheap. I'd never just let you take over my payments." I get this question all the time. People get heated. They get emotional about the whole thing.
What's so interesting about it is that you can learn a lot from Rudolph's story when it comes to this particular topic, because just like Rudolph who discovered a misfit island, when you begin talking to truly motivated sellers, you realize that there are a bunch of them out there. You realize that they absolutely do exist. More importantly, there's a lesson. When people bring up ideas like, "Phil, I would never do that. Why would I expect someone else to do that?" I want to bring up a great lesson in business. Ready for this?
You are NOT Your Customer
Just because you may not do something doesn't mean somebody else wouldn't, doesn't mean Rudolph here may not want to do it because we're very, very diversified human beings. Think about it. People spend tens of thousands of dollars on purses. Why would anyone in their right mind spend $30,000 on a purse or $10,000 on a watch. People do it. There's a market out there for those people. It's a big world out there.
Have you ever driven past a shopping center or maybe you see some store like a craft store or something that you would never frequent and you drive by and you think, "How the heck do they even stay in business. Who shops there?" You are not their customer. You never were their customer. They don't care. They have their own set of customers out there. Does that make sense? You are not your customer always when it comes to being a real estate investor. You are buying properties from people that are in a bind, in a situation. They just want to get rid of their home. They don't even care about their property. They're different from you.
I've got a great story on this. This happened in late 1999 in Nashville, Tennessee. A friend of mine was looking for a property to buy and saw an ad in the paper. This was back when they used newspaper classifieds. Internet was just getting going. It said that this person wanted to sell their home for $200,000 or best offer, but my friend knew the value was probably like 6 or $800,000. He was like, "Wow, this things crazy." He wasn't a real estate investor by the way, he was just looking for a home for him and his family. He gives the person a call. The person says, "Yeah, yeah. I'll sell it to you for 200,000." And the guy says, "I'm a little confused. Does it have like a sinkhole in the back yard? This property should sell for a lot more money." He said, "No, no. I'm selling it for this amount."
It turned out the owner of the property had invented "The Noodle". You know your kids probably play with them in a pool. It's like a long little foam thing that they can float on and play with. "The Noodle", this guy invented that. He was an inventor. He made millions and millions of dollars from this invention as well as some other inventions that he had done. He was convinced that the world was about to fall apart when it turned the year 2000. What he did was he wanted to sell all of his assets, everything prior to turning the year 2000. He wanted to get rid of this home quick. He wanted to do it cheap and he was happy to do it. He had plenty of money. He helped my friend move in. My friend bought the home. It was worth $650,000. He bought it for $200,000 and the seller helped him move in.
You are not your customer. Well, it turned out that the world didn't end. I guess it did for that gentleman. He bought this RV. He moved his family up into the mountains and then nothing really happened. It turned out that I think he had to get a divorce. His wife thought he was crazy. Maybe the world did end for that guy. The point is, you are not your customer. There are so many different situations where sellers are in a bind or their in a situation where a real estate investor is the perfect solution for them. Even better than a real estate agent. You become their perfect solution. Once you've seen one, all of a sudden ... It's like Rudolph. All of a sudden, you find misfit island. Does that make sense?
I hope this little entertaining analogy gives you a better vision, this concept, because it's so true. These deals are out there. It's like if you bought a brand new car and you thought nobody else had that car on the road. You start driving around and all of a sudden, "Gosh, a lot of people have the same car I do." How did that happen? They were always there weren't they? It's just your focus changed. The same is true when you because a creative real estate investor. Your focus changes. You start to pick up on little things.
I was in the UPS store the other day. The UPS store owner had four different properties that all of which were giving him hassles. He just wanted to get rid of them. I overheard it. It's like your ear, your everything, gets tuned to this stuff, and you see these opportunities other people just don't see.
Have a Merry Christmas
Also, I just want to tell you, Rudolph and myself, Merry Christmas, Happy New Year. Just remember you are not your customer and just because you may not ever do a deal, that doesn't mean the seller wouldn't be happy with that deal. Be open-minded. You'd be surprised what can happen in life.