This Issue: Opportunity Won't Knock Twice: Why Today is The Day to Get Rich with Foreclosures

Although it’s become one of my signatures, firing people is not something I enjoy doing. In reality, I’d rather hire really great employees in the first place so that firing them is something I never plan on doing.

But in reality, managers are often placed in tough situations when they have to let underperforming employees go. Since most people don’t have the benefit of a boardroom and cameras following their staff around, it’s not always easy to know what to say or how to do it. So let me offer some tips.

First, never fire someone when you’re angry or when other workers are present. Don’t let an employee bait you into losing your temper. If you feel yourself getting angry, immediately walk away and cool down. When you are completely composed, discuss the situation with someone who can give you objective advice. Develop a plan on how to proceed and continue reviewing it with an attorney.

Never blow up in front of your employees. When you’re displeased with a worker, discuss your feelings with him or her privately, not in a public area where other employees might watch or overhear. If you’re concerned about meeting alone with the employee, have another member of your staff sit in. Meet in a neutral area - not your office - so you can get up and leave.

At termination meetings, never get drawn into debates or arguments. Be civil, polite and businesslike. Expect the employee to be upset, so be direct and courteous, and give the employee an opportunity to speak.

Fortunately, I seem to attract people who like to work hard and get a sense of achievements from their efforts. Most of the people I’ve fired knew they weren’t performing to a satisfactory level, and I’ve had very few problems in that area. I’m demanding but fair, and they know it.

What is really about to happen with mortgage foreclosures in the months ahead? I have been reading some pretty sobering news in many places over the last week.

• An article on Reuters last week, “Top Investor Sees U.S. Property Crash,” reports on Jim Rogers, a top commodities investor. Rogers is predicting that property prices in some areas of the U.S. will fall between 40 and 50 percent when the foreclosure bubble bursts. He’s selling his mansion and moving to Asia. It’s very strong stuff. To read the article, click here.
• Another article in the Wall Street Journal, “Green Thumb: Bulletproofing Your Mortgage,” helps mortgage-holders assess whether their own loans are in danger. To read an article summary, click here. (Note that the Wall Street Journal will charge you $4.95 to download and read the entire article.)
•  To put a human face on the foreclosure story, let me direct you to “Family Struggles to Sell before Foreclosure,” an article in The Olympian, a Washington newspaper. Click here to read the article, which tells the story of a family that has been unable to keep up with high monthly mortgage payments.

We are not alarmists at Trump University. We develop strategies that help our students take wise steps to prepare for future events, protect themselves from harm - and if possible, turn negative circumstances into profit-making opportunities.

We feel that the coming months will represent one such opportunity, as growing numbers of foreclosed properties become available to astute buyers. But to profit from the trend, you need some focused skills. I would urge you to learn more about our new Real Estate Foreclosure Coaching Program, taught by Jay Gottlieb. Click here to find out how.

Michael Sexton: What were you doing before you started investing in real estate?

J. B. Olson: I taught elementary physical education for eight years! And that was a few years longer than I should have, because way back in 2000, I read Robert Kiyosaki’s book Rich Dad, Poor Dad and I got it. I understood it, I believed in everything in there. But it still took me another five years to get the courage to break out of my comfort zone and get going.

Within myself, I always knew I could do it. But even with confidence, I needed somebody to help me, to point me in the right direction. I was searching, doing a lot of research online in those years, but I was not taking action.

I was attracted to various mentorship programs. When I learned that Donald Trump had launched his Real Estate Investor Training Program, I was very interested. It took me another five to six months before I expressed interest in the program. Trump University contacted me, I went through the interview process, and here I am today.

MS: Are you still teaching?

JBO: No, no. I haven’t been teaching for two years now.

MS: Can you pinpoint some of the skills you needed to get your start?

JBO: I definitely needed to learn how to analyze deals, how to pick them apart and look at both sides.

MS: What about motivation - getting out of that “comfort zone” you described?

JBO: It was great that every week, I was given action steps that I had to complete. I couldn’t hide. Each week, I had to report back. Did I indeed do my homework?

In the beginning, some of the work was theoretical, as in, “Read Secton I.” But then the assignments quickly became, “I want you to go look at 10 properties this week,” or even, “Look at 15 properties and make 10 offers.” So the homework turned out to be action steps.

As I said, I needed someone to point me in the right direction. And after the completion of the coaching part, I felt very confident. That gave me the ability to acquire a lot more property since.

MS: Did you have substantial financial resources available before you started in real estate?

JBO: I had a small nest egg. I had some stocks and a little bit of equity in my primary residence to help me acquire my first properties. But overall, not a whole lot.

MS: What kinds of properties are you working with?

JBO: I am strictly in residential properties right now. And right now, I have 11 properties. At one point, I had 12, but I have sold one of them. My current holdings are four condos, three town homes and four single-family residences. My immediate focus is to continue to build up my residential portfolio. My long-range plan is to move into commercial properties.

MS: Did the properties require renovation?

JBO: Two of them did. I did buy one rehab property while I was still in the program. But with the market going flat, I have come to adopt a buy and hold strategy. I mean, this is the best time to buy. I did buy one property on a construction loan. Then I renovated and refinanced it. That was a nice way of buying a property with no money down that I learned.

MS: That’s spectacular.

JBO: Yeah!

MS: Do you use a management company to maintain your properties, find tenants and handle the other details?

JBO: No. I manage it all myself.

MS: Do you have employees? Do you work out of your home?

JBO: I work out of my home. Eventually, I may look at adding an assistant. As I acquire more properties, some of the workload of managing them will begin to take me away from making deals and acquiring more property. So I am going to look at hiring an assistant for that reason.

MS: What do you see next? As you mentioned, commercial real estate?

JBO: I will continue to acquire more residential properties. Because of the number of properties I own and the way the lending market has tightened up considerably, I will do more creative deals so I can continue to keep my pace going. I will be looking at doing deals with lease options, contract for deed (or subject to). I will continue to build up a residential portfolio for 2007 and 2008, and I will then be looking more at commercial properties.

MS: So that is a terrific amount of progress in just a few short years. Congratulations.

JBO: I am 34. I have many years of real estate investing ahead. I tell everybody, the investment I made in the Trump University has paid more than dividends. It was instrumental in getting my company going.

I also know that you have to be a lifelong learner. I’ve had a number of people ask me, “What are you doing? I want to sit down and have a cup of coffee and talk with you.”

Because I have a background in teaching, I also want to become more of a mentor and a coach when it comes to real estate investing. I’m starting the groundwork for that right now.

Your average person who is out there walking down the street right now probably thinks they can’t do this. But they can! They just don’t have the knowledge or the tools.

Make no mistake about it. All the best indicators are telling us that the coming months will see a dramatic increase in property foreclosures in the United States.

Just two days ago on March 13, an Associated Press article reported that late mortgage payments and foreclosures had reached a 3 ½ year high. The alarming news even made the front page of the New York Times on March 11, when “Crisis Looms in Mortgages,” an article by Gretchen Morgenson, described some startling realities. Not only are more property owners losing their homes to foreclosures, now some mortgage-lending institutions themselves are beginning to close their doors. They were lenders that were writing sub-prime mortgages to customers who really could not manage their loans - often buyers who were already carrying excessive credit card debt.  

It looks as though things will get worse before they improve, which will be a very bad thing for people who cannot carry their mortgages. But it will also be an advantageous time for real estate investors to acquire foreclosed properties.

Buying foreclosures and profiting from them is challenging. If you're new to real estate investing, you need to know what you're facing. Although the profits from foreclosure investing can be huge, there is an awful lot to know in order to avoid the problems that can occur. You need the skills to:

• Identify properties with high-profit potential.
• Buy at the lowest price.
• Strategically finance your investments.
• Work the numbers on your deals to be certain that big profits lie ahead when market conditions change.

Remember, too, that buying foreclosed properties does not mean taking advantage of unfortunate people who are unable to hold onto their homes. There are many ways to structure deals and make huge profits. I’d urge you to take a close look at the Real Estate Foreclosure Coaching Program that I have created for Trump University. Opportunities like these don’t come along every day. Act decisively, and you can make significant profits in the months ahead.