Episode 26: Interview with Mike Cantu Part 2
Podcast: Play in new window | Download
Subscribe: iTunes | Android | RSS
Episode 26: Show Notes
Here’s part 2 of Doug’s interview with Real Estate Legend, Mike Cantu. If you haven’t already, make sure to listen to part 1 so you don’t miss all of the great advice from one of our top Mentors.
Here’s a Few takeaways from today’s episode:
- Mike’s process for making tough decisions in real estate investing
- What causes many investors to fail and how to avoid it
- Mikes Advice on working with a loved one
- Traits successful investors tend to have
- Mike’s advice for someone new to real estate investing
Resources:
Episode 26 Transcript
Download Episode 26 Transcript
Doug: Welcome back to the Spouses Flipping Houses podcast, Episode 26 today.
Andrea: We are back this week with the second half of our interview with Mike Cantu. He is one of our most respected mentors, a really great guy. He has over 30 years of experience as a real estate investor. He’s been super successful, and he is chalk-full of wisdom.
Doug: Definitely, definitely. You’ll really want to stay tuned for the second half of the interview. Mike gets into his decision making process when it comes to tough decisions in this business. He talks about working with his daughter and working with his brother, so you have that aspect of the business there.
Good stuff, get your pen and paper. You’re going to want to pay attention. But first Andrea, fill us in on the drunk driver situation.
Andrea: Yeah, you know it turns out that it’s really not that big of a deal, and we thought it was. We got a call from our contractor saying that a drunk driver has driven into the back of your property. You’ve got to check this out. And so we did.
Naturally, we totally freaked out and it ended up being not that big of a deal. A drunk driver did crash into our back fence. It took out our fence and the neighbor’s fence, so it kind of stinks but not really that big of a deal. We’re in escrow, and we’ll just fix it and move along.
Doug: Good. So the car didn’t hit the house, no damage there?
Andrea: Nope. It didn’t even go into the yard, just knocked down the fence.
Doug: Okay, driver’s okay. Everybody’s good.
Andrea: I have no idea about the driver.
Doug: And then we had an interesting conversation with our six-year-old yesterday as we picked him up from kindergarten.
Andrea: Yeah, he sort of uncovered that our middle son, our nine-year-old, is following in his father’s creative childhood entrepreneurial footsteps.
Doug: I’m a little bit proud, just a little.
Andrea: So we’re driving home with our son, our six-year-old son Owen, and he says, “I can’t wait to get home. After I finish my homework, I’m going to play this certain game on the Xbox, and I got to the next level. I can’t wait to play the next level.”
And we’re like, “Wait a minute. You’ve been stuck on that other level for so long. How did you get past it?” And he said, “Oh well Weston helped me.” And we said, “Wow, what a great big brother you have. That was so nice of him.”
And he said, “Well yeah, I had to pay him.” Wait a minute, back it up, “He made you pay him to help you get to the next level?”
“Oh yeah, just a few dollars.” Well he’s six, so to him dollars, he doesn’t really recognize the value quite yet. And we said, “So how many dollars did he charge you to get to the next level?”
“Fifteen.” Oh my goodness.
Doug: So I’m looking at Andrea at this point, and I’m half boiling inside that one son was taking advantage of the other son, but then I’m half smiling and proud that wow, that’s a great way to make some money that he discovered.
Andrea: Off knowledge that he had that his brother didn’t have and was quite willing to pay for.
Doug: So I, in good conscience, could not be the one to discipline him on this because yes, I’m guilty as a youth of charging my younger brother twenty-five cents, only twenty-five cents…
Andrea: Yeah we have some serious depreciation in order.
Doug: …to play a game in Nintendo, so inflation has really kicked in for the video game knowledge.
Andrea: Yes and your little brother was so loyal that he would set quarters on your Nintendo if he played it when you weren’t home.
Doug: Hey you know, he thought I had hidden cameras, which I’m glad he thought that. He was a good paying customer.
Andrea: Did you charge the neighbor kids too?
Doug: Yes, I think I had a sign with a little jar that said $0.25 per game, so pretty much anyone who wanted to venture in and play my Nintendo, you’ve got to pay up. You know what I mean?
Andrea: Well you started young, what can I say.
Doug: Well if you haven’t visited our website we have a free gift for you: SpousesFlippingHouses.com. Notice I didn’t say “www.”
Andrea: Good job. And then also, if you would leave us a rating and review on iTunes we would really appreciate it.
Doug: Yes so definitely do that. It really helps us out. Also keep sending in your questions. We’re getting feedback from people, and we love it. We’ll have another question and answer episode coming up ahead, so send in some more questions and we might address it in a future podcast.
Andrea: And you can send those questions to andrea@spousesflippinghouses.com
Doug: Alright, so that’s enough chit chat. Let’s get into the interview, the second half of the Mike Cantu interview.
Doug: One thing that I’ve heard you talk about over and over is that lifestyle and overhead has taken down more investors than you know. Could you touch on that a little bit because you had a good point about keeping your overhead down?
Mike: Yeah, and Doug I’ve witnessed that over, and over, and over again, and the first time around most people make a lot of money, they want to show it off. It’s part of human nature; it’s part ego-driven. I’m not sure what else it is. But people want to show the world how well they’ve done, drive the fancy car, be in the big house in the right neighborhood, and fancy clothes.
And it’s just upgrade, upgrade, upgrade, and you know I made the comment about food/shelter/clothing and beyond that and a few upgrades, it’s all scoreboard after that. I have always tried to be self-sufficient and have things sustainable.
Sustainable is one of my favorite words that I feel very fortunate that I haven’t had to have major, major lifestyle cutbacks because of finances. But then again, I’ve never lived a really high-profile lifestyle. I like the sustainable part of it.
A couple of scenarios here: I live in a nice neighborhood. It’s a 1903 house made out of rocks, looks like Fred Flinstone’s place, but it’s on three-quarters of an acre, and there is a 1950s stucco house off to the northeast on the property. Most people don’t even know that it’s on my property, but that house runs for $1,500 a month, and the property is paid for.
All of utilities, property taxes, everything to do with this property where I’ve lived for years is about $500-$600. So there’s a thousand dollars in positive cash flow on my own residence. Then I have the place in Huntington Beach where I spend the other half of my life.
It’s two duplexes on a double lot downtown, walking distance to the beach, pier, and Main Street. But one of the rents there covers that entire four-unit property. My daughter, and her husband, and my grandson I gave them one of the units. I stay in one of them, and there’s two more units.
And one of the rents there covers property taxes, gardener, water, trash, all of my utilities, everything to do with everything, and there’s money left over plus the rent from the other units. So both of my living arrangements pay me monthly rather than cost me monthly.
And that’s very sustainable, and I try to live my life like that. My office house down the street, my corporation rents that from me, but there’s also a lifelong friend that has a travel trailer that he lives in there. I call it my one-space trailer park, and the income from the one-space trailer park covers all of the utilities and everything else on that property.
So my existence isn’t a dream; it’s at best or at worst a breakeven, and most of the circumstances actually pay me. So I thought I tried to carve out a lifestyle that everyday there’s a lot of money left over.
Doug: Yeah I think you’ve painted the picture before to imagine a bathtub and you turn on one faucet. And most people have a drain there, and everything coming in that faucet is going right out the drain, and that’s kind of the 30-day cycle you’re talking about.
Mike: Yes, and there’s such a glaringly obvious answer to that problem. With one faucet, one drain, and they’re usually about the same size with nothing left over, so 100 percent of the income goes down the drain. The glaring obvious solution to that is to line the walls with many more faucets, to have tub spouts coming out everywhere and turn them all on full blast, and watch your tub overflow.
Doug: And the thing with that also is don’t increase the drain size too much.
Mike: We want to shrink that drain size down as much as you can. I know early on I shrank mine down to the point of making the decision of growing my own vegetables and sewing my own clothes. But be very, very, very consciously aware of the monthly outgo.
And I’ve always tried to run a low overhead, and I’ve realized you can only get it down so low otherwise you’re going to start doing a lot of minimum wage activities that I have no interest in doing. Those have to be delegated, and then you’re going to create some overhead there but just a manageable overhead.
A good example Doug is a good friend of mine who, oh in about 2005 out in the Palm Springs area, had a bricklaying business and at lunch one day, he told me his overhead was $50,000. And it was part of a fixed overhead, and I thought unbelievable.
Then he smiled, and he says, “But we bring in $150k.” And I thought you know, that’s not such a bad business model, but I wonder if it’s sustainable. And the answer to that question was a big fat no. But when the market changed, that $50,000 stayed the same, and I remember months where he’s bringing in $10-15,000 paying out his $50, and yeah that tent folded up a long time ago.
So back to that word sustainable, such a key word.
Doug: Yeah, very good lessons in that. I want to shift gears a little bit and talk to you about your decision making process. I had a problem come up a few months ago where we had a property under contract, and we were moving in on the purchase, and it was going to be a great deal for us. And then the seller at the last minute called and backed out, basically broke the contract, and I suspected it was because he had another buyer that came in a little bit higher than we did.
So it was frustrating, and I called you up for advice, and you had an interesting way of dealing with situations like that. Can you go into that?
Mike: Oh sure, well first of all Doug, I want to tell you that it’s my philosophy that I like to leave a trail of happy people in real estate. And an unhappy seller prior to the close of escrow will remain an unhappy seller after close of escrow. So if things aren’t right, I’m not going to force a sale.
I have never sued somebody for a specific performance to close a real estate deal. I’ve had several deals fall apart over the years because of other investors offering more, and that’s always a frustrating one but for the most part, if they’re not happy with me and my proposal and everything else, I’m going to let them out of the deal.
But my decision making process that I shared with you that day Doug, there’s four people in my life, very, very successful real estate entrepreneurs, all very different people. Between the four of them, there’s close to a 150 years of combined experienced, and I am very close with all four of these people.
And when I have a real estate challenge and I’m not sure which direction to go, I will start to question: What would Mick do? What would Earl do? What would Bruce do? And what would Art do? And with a little bit of thought and a yellow pad, within five minutes 100 percent of the time, I have my answers.
And I’m a little bit like each of those four people. Now Mick and Earl are more alike, and Bruce and Art are more alike, but yet they’re completely different people. Earl and Mick are more men of principles, and they do a lot of things just based on principles. And Bruce and Art are sometimes the path of least resistance, sometimes it’s common sense, but I’m looking for four different answers when I ask that question.
And quite often I catch myself smiling when I ask that question thinking, I know exactly what Earl would do. I know exactly what Mick would do. So yeah, I look to the people that are living the life that I’ve always wanted to live, and their thought process and their decision making process have led to where they’re at now, so yeah, those four people are a huge influence on me.
And I can solve 90 plus percent of my real estate challenges just by sitting down and going through that exercise. What would Art, Mick, Earl and Bruce do? How would they handle this?
Doug: That’s fantastic. And you respect all of those four people in different ways.
Mike: And I love to have lunch with each of those four people, but they’re so different and so unique, yet they’ve all carved out their own niche under the great umbrella of real estate. They all live real estate from sun up to sundown. They’re all financially free, and they have a great life because of it.
Doug: That’s fantastic. Well this show, our podcast, is called Spouses Flipping Houses. It is centered around people, not just spouses, but loved ones— brother, sister, father, son, partners— partnering up in the business and doing that with that added dynamic. Now I know you don’t do the business with a spouse, but you have worked closely with your daughter and your brother I believe.
Mike: Yes.
Doug: Can you talk on that?
Mike: Oh sure, let’s touch on my daughter.
Doug: Okay.
Mike: Early on, I told her she was going to learn two things. She was going to go to community college, and I said well I’m not going to force you into anything; however, real estate is going to be part of your life. You’re going to learn management and if you’re too lazy to learn management, I’ll give this job to someone else when I’m done with it.
And that was the last thing she wanted to hear, so I thought okay, with this look on her face she’s going to become a very good property manager. The other thing I told her is you’re going to take college-level psychology. That is one of the most important classes I think I’ve ever taken, understanding human nature, why people do what they do.
I think it’s our job in this business to size up people: tenants, sellers, everybody in this business. Our job is to size them up and figure out how we can go about dealing with them. So I got her through the real estate principles. She learned the basics, and I got her through psychology, and I think she was 19-years-old when she came to work in my office.
I encouraged her to follow her passions, and she investigated quite a few things. Found out she didn’t want to do this, didn’t want to do that. She wanted to be a jockey, and then went to jockey school for a little bit and realized that’s a very dangerous sport. She still loves her horses but doesn’t want to be a professional jockey.
So she came to work in my office Doug, and I want to say that was about 2008. The market had just fallen apart, and we got 21 months of working together. December of 2010, she ran into some medical challenges that took her out of business for a year. Recovered from all of that, and then she got married.
Then she got pregnant, then had a baby, and as far as I’m concerned she’s still out on maternity leave even though my grandson turned two back in February, and she has another baby on the way due in June.
Doug: Hey, congratulations Grandpa!
Mike: She hasn’t been in my office for several years, but that 21 months that we did work together, we got together, bought and sold some houses, retailed some stuff, wholesaled some stuff, and we kept some stuff for her. And I realized that she was going to be out of the office for quite some time.
We had a five-year plan and like I said, we didn’t make it to the two year mark, but we did get enough houses together to where in the last few years, I’ve sold some of her houses and paid some of the other ones off. And right now she has four houses that are paid off, and she’s got some other houses still.
Everything cash flows, but it’s created over $4,000 a month net income, and that’s not bad maternity pay for being a full-time mother.
Doug: No, not at all, not at all.
Mike: And there’s a lot more upside potential. There’s still more houses to sell and more cash flow to create. So working with her, I told her I’m going to share my motivation. I don’t want to pay for everything for you for the rest of my life. I want to get you financially free.
So this is going to work for both of us. Every dollar you create, that’s a dollar that I get to keep.
Doug: Now how did that dynamic go? I mean, you know she’s your daughter. Are you telling her what to do? Is it a touchy work environment there? I mean I guess everybody is going to be different, but how did that work for you guys?
Mike: Yeah, at first I learned some lessons working with her, but you know she is my daughter. She does still have some tender feelings there, and tone of voice is everything. And if I have the wrong tone of voice she could have a meltdown over it.
I realized that I’ve got to really watch what I say and how I say it but of all the years in my office, those were definitely hands-down the favoritest years, seeing her every single day and being able to work with her and create a future for her.
And I know that there’s round two of that, but right now it’s all about being a mother, and expanding the family, and everything else. I’m glad we laid a solid foundation to where she’s got her core income. Her husband has got a great job; he works full-time. But her income isn’t too far off of his income.
And she wakes up and does whatever she wants or whatever needs to be done to be a mother.
Doug: That’s great. That’s great. I’m sure she’s grateful for it.
Mike: And my brother is a licensed general contractor, one of the best dealmakers that I know, and he’s finishing up a big job right now. But that plan is he’s going to be back full-time, and I’m going to be doing joint venture deals with him. We’ve already laid out the plan.
He’s been in real estate over 20 years and like I said, he’s one of the best dealmakers that I know. He’s got great people skills and a great toolbox of real estate skills.
Doug: So for anyone considering going into this business, or bringing in a loved one, or working with a loved one, would you have any words of advice for them going into that?
Mike: Well, now that has to be broken down into categories. First of all, if it’s a husband and wife, Jack Easton, who has been a big influence on me, is one of the most successful real estate investors I’ve ever met. He spends about half of his life travelling to exotic places with his wife, and it’s a wonderful existence.
But I’ve learned so much from Jack about working with a spouse, that the first question is find out what they don’t want to do.
Doug: Good advice.
Mike: And then take that off of their place.
Doug: Very good advice.
Mike: Now I’m speaking to the man and the wife, and the wife figuring out what she wants to do. I don’t have a wife, and I’ve never worked with a wife, so I’m not an expert in that area. But I have watched a lot of people that have gone down that road, and there seems to be a common theme, and that is the wife does what she wants to do if it’s pertinent to the business, and the man figures out how to do everything else.
You’ve got to cut the business off at some point in the day. You can’t live it from sunup to sundown, 24/7. Real estate in my world Doug has always been a means to an end. It’s certainly not the end-all. Once again, it’s not the houses that do it for me. It’s the monthly income.
You know, I’ve often said that if you take the money out of the equation, that my 35-year love affair with real estate will come to a screeching halt. I am in it for the money, and I make no qualms about that. I do this strictly for the money.
It’s an immediate goal, and it’s got to work for both people. My attitude is you let the wife pick and choose what she wants to do, and you do everything else or find someone else to do everything else.
Doug: Yeah, I think there’s a good lesson in that for anyone. If somebody is forced to do something they’re miserable doing, it may not last that long. It’s going to cause problems.
Mike: Right, but I do think it’s always good to do it once. Everybody in this business needs to do everything once that they pay somebody else to do. Mick gave me that lesson early on. Everything to do with the rehab I had to do one time.
I had to change out an electric panel while Mick sat in a lawn chair and used the stick and pointed, and it was terrifying because I got shocked good as a kid, and I still fear electrical to this day, and I did a complete service panel change out and lived to tell about it. So I encourage people to do everything once.
Jordan and I rehabbed a house. We spent the summer of 2009, a couple of months her and I, rehabbing a house on, I remember, it was on Lawrence Avenue. And she learned a lot. I loved working with her. I didn’t miss doing that part of the business, but I thought nope, she should learn how to do it one time, and it was great father-daughter bonding time.
Doug: Yeah and you can appreciate the next person who has to do it, and what they’re going through, and understand a little bit better.
Mike: I’ve also heard this: I heard Jordan on the phone, and she said, “Oh my dad loves real estate. Me? I like real estate. I love dogs and horses.” So I think that’s the difference. I am more passionate about it than she is, and she sees it completely strictly as a […] goal.
I’ve always used the analogy “money is a lubricant that lets you slide through life and without it, it can be rough.” And she has the lubricant mentality that you create the cash flow, you can do and live life the way you want. I create the cash flow so I can get out there and create more cash flow.
Doug: What are some common traits that you see amongst successful investors today? Are there some common traits you would be able to pinpoint?
Mike: Now, let’s define an investor first Doug. I read more than once two numbers that stick with me. The average real estate entrepreneur lasts about 18 months, and the average landlord lasts about 2.2 years, so those are two humps that everybody in this business that hasn’t been around that long should make it a goal to get past and not become the statistic.
Doug: So maybe let’s define it as people who have gone longer than that and surpassed the statistic, maybe three or four years full-time.
Mike: Yeah, okay several traits. First of all, persistence. I am an extremely persistent person and working with Mick Blackwell for years makes about as persistent as they get. He’s just relentless, gets out of bed while it’s still dark and he’s like that Eveready rabbit that they wind up in the morning and at six in the evening, he’s still going forward. So persistence, that is absolute key.
A desire, not just desire, but a burning white-hot desire, an obsessive desire, and a plan, a direction, a vision. There’s got to be a roadmap that you’ve laid out, and you’ve got to have that burning desire, and you’ve got to be persistent about it because you will be knocked down every single day, somehow one way or another.
Oh I heard I think it was a Japanese saying that you get knocked down seven times, get up eight. That’s always been my philosophy like the punching, no the clown guy, but he had the punching bag as a kid. It had sand in the bottom. You’d lay into him, and it’d pop right back up.
And I think that’s the story of my life: get knocked down, get back up and keep on going. So not giving up is an absolute, absolute key component of that Doug. I’ve been more than once in a position where I thought this is a turning point, how do I recover and keep going in my chosen direction here?
And you know, most people think that going from start to success is going to be a straight line, and it’s nothing like a straight line. It’s like an airplane flying from the East to the West coast, but 98 percent of the time, that plane is not on the straight-line track.
It’s correcting, getting back on track, 98 percent of that flight is correcting, correcting, correcting. And that’s the way my real estate has been. You cannot ever take your eye off the prize. Every day I wake up, and to this day I still have goals, and those goals are what got me going early on and keep me going to this day.
You’ve got to have some direction; you’ve got to have a reason, and you’ve got to have some goals.
Doug: And do you write your goals down?
Mike: There’s got to be a “why.” Why, the word “why,” is such a powerful word that it is usually the tipping point of whether you do something or you don’t do something. If you have a strong enough why, you will do whatever it takes. And I have several whys but like I mentioned earlier, being a single parent and having a young child means failure is not an option.
That was absolutely my attitude. Of all the things that could go wrong, failure was just unacceptable.
Doug: Yeah that’s just good stuff, good stuff. I don’t want to take all of your time here. We’re going to start wrapping it up, but would you have, if somebody who is fairly new getting into this business, maybe they’ve done a deal or two but they really want to grow your business. You’ve just listed off several great traits that you see amongst successful people, but what kind of advice would you give somebody like that today?
Mike: That wants to continue to grow their business?
Doug: Yeah they’ve maybe done a deal or two, or maybe not quite done a deal yet but they really want to get a rental property, or build a portfolio, or start flipping houses. I don’t know, what kind of advice can you give them?
Mike: The best advice I can give there Doug is to continue to grow your education. I have been in education fanatic most of my real estate career. Ten percent of what I earn is fair game to put back into bettering myself as a person, bettering my real estate skills, bettering my toolbox, but for bettering.
And the education process takes a while. It’s not cheap. You want to search out the best education you can find. Be very careful of who you learn from, and my requirement is they always have to be doing what they are teaching and they have to have something to show for it.
I didn’t ever want to hear about the guy that used to do it, and had a bunch of stuff, and now is teaching because he needs to eat. That’s not the guy I want to learn from. I want to learn from the person that doesn’t have to teach, and I think it keeps going back to the education part.
Looking back on my life Doug, as I grew education-wise, I grew real estate-wise. There was a very proportionate growth between the two of them. I don’t ever remember expanding huge in real estate without new education to back that up. So it’s reading books— I’m still an avid reader. I read an hour a day.
I still go to at least three real estate seminars a year. There was a point in time where once a month I was heading off to some other state for a weekend class. I was just obsessed about getting the information, witnessing what it has done for other people. And I would think that I need some of that myself.
So I give it the education, that is what separates people. I get asked questions all of the time, and I smile and think I’m happy to share this because those are good questions. And I too had those same questions at one point in life, and I was constantly trying to put the puzzle together, searching.
And it was a combination of going to classes, reading books, and associating with other real estate investors and hearing their real-world/real-life stories. So as someone who wants to grow, go to the real estate clubs, associate with like-minded people, try and become part of a Master Mind group, and just treat it as life or death.
That if you’re going to survive in this business, there are no shortcuts. You’ve got to be well-rounded, and you’ve got to plan the time.
Doug: That’s fantastic. Great stuff Mike, in fact, speaking of education, you had some courses. Is there still a way people can buy those from you?
Mike: Yes, now I’ll give you a quick conversal on those Doug. As you know, I have “Don’t Get Voted Off Real Estate Island,” which was everything I have done as a real estate entrepreneur— the good, bad, ugly, rentals, wholesaling, retail, philosophy, attitude, game plans, strategies. It’s pretty much my whole life outlook on this business.
It was originally going to be a three-day class, got shrank down to two, and now down to one. I crammed it all into one day. I have never advertised or promoted that course, but a week does not go by that I don’t sell between one and three of “Real Estate Island.” And then I have my rental properties and management course.
That’s the one Bruce Norris talked me into doing and they hosted it. We actually ended up doing it twice because it sold out both times. I didn’t want to do it a third time so we recorded it, but that is my rental program from A-Z. It starts, it’s not all detailed. It’s philosophy, attitude, from the thinking about going in the business to everything to do with it down to the paperwork.
Now the thing about my courses Doug is that they’re both $397. They come with a lifetime money back, no questions asked, guaranteed. I have always put that out there that a fraction of one percent of my income has come from education materials that I’ve sold, and ninety-nine point something is from actually doing what the education that I’ve sold teaches.
And I tell people, “If they’re wheeling you into the convalescent home and you still haven’t figured it out, send the course back, and I’ll give you a 100 percent refund so you have some bingo money.”
But it does come with follow-up, and I encourage people to continue their education, and I jokingly ask people if they’ll sell me the course back. No one’s willing to sell it back, and I’ve never had one returned. So it is packed with life changing stuff if you apply it. It talks a lot about student philosophy, but I personally think it is priceless.
Doug: We are living testimonials of the rental property management course of yours. That is hands-down everything you need, really, when you’re starting in real estate and investment or rental properties. It’s very thorough and a great product.
Mike: And that Doug, that course is my interpretation of Mick Blackwell. I mean he was my big influence. Mick has collected over 100 rents as long as I’ve known him up until the time he sold his apartment, and I went to the “Mick Blackwell School of Management” real world for over 20 years of being business partners with him and seeing it everyday to where it worked for Mick, it worked for me.
And it’s not my favorite thing to do but at the same time, I spend literally less than a couple of hours a week dealing with my rental properties. Not all the vacancies, a little bit more time involved, but Kim answers the calls. I’ve got Justin out showing the houses, and I oversee the maintenance and repairs of them, but we’ve got a system that works now that we’re on pretty well. And we run a really tight ship.
Doug: Yeah and speaking from a landlord’s perspective, that is a fantastic place to be. That is amazing that you can do that with so few hours involved.
Mike: And I can tell you Doug, it has a lot to do with what it is that I’m managing. That has a whole lot to do with it, and we didn’t touch on that one. But over the years, my philosophy has been a John Shaw quote from many years ago. He always said, “Every year, go through your portfolio. Take your worst house out to pasture and shoot it. Replace it with a better house.”
And over the years, I have upgraded, upgraded, and upgraded. I’d get rid of two houses in a “C” neighborhood and trade them for one house in an “A” neighborhood. And then got most of the debt removed from these houses to where a good house in a good neighborhood, well maintained at about 90 percent of market rents.
The odds are that’s going to be a pretty hassle-free, well performing rental house, and I’ve learned all of this the hard way. Early on, I had all of the wrong houses in the wrong neighborhoods. I used to spend 30 days a month attempting to collect rent.
My old job title used to be rent stalker. I stake out a house all day long to wait for the tenants to come home. They’d pull in the driveway; I’d pull in behind them. They’d get out, go in the house. I’d knock on the door, and nobody would answer. And I realized that things have got to change here, and it’s been a constant evolution over the 34 years I’ve been in business trying to create the ultimate for me.
Doug: And you know, but everybody has to start somewhere, and that was your starting point. And you realized that early on— that you needed to upgrade that.
Mike: Oh yeah. I would not have made that 2.2 year mark as a landlord had I not had a vision of some sort.
Doug: Right, right.
Mike: Yeah I’ll never forget the house I had in a bad neighborhood in San Bernardino, one of the first houses I had with Mick. And after beating about the fortieth applicant, I thought, I wonder if I’m going to meet someone who has a whole mouth of teeth.
And it was just, I think the first twenty people combined didn’t have a full set of teeth. And I just thought, I think I’m not in the right neighborhood because these are not people I want to deal with, live next door to, or communicate with. And I learned that lesson over, and over, and over.
One of my big questions for a rental property, if I’m going to keep it, is what’s the draw? What draws people to this house, and what type of people is this house going to draw? Like the Laverne house is a block and a half away from the University of Laverne, that’s where my older sister went to college.
And I thought, no, that’s an A-plus neighborhood. I know what the draw here is.
Doug: Yeah, yeah. Is MikeCantu.com where they can get those courses?
Mike: Oh yes, yes, yes. Back to my courses as I got way off in the commercials. Back on track Doug.
Doug: That’s alright. I want to give people a chance to get this because I mean for $397, it’s about the best $397 you’ll ever spend if you’re wanting good, solid real estate education from someone who is doing it.
Mike: Yeah, and if anyone decides they want both courses, I’ll knock off a hundred bucks. You have to pay full price for both of them, but if they send the course back, I’ll include a check for $100 because it does go through Paypal. It is MikeCantu.com.
The whole purpose of that website is to have my two courses available and like I said, I don’t promote, advertise, or anything else, but I don’t think a week has gone by ever since I’ve done those courses that somebody hasn’t ordered them. It’s all been word of mouth, just like you’re doing right now Doug.
Doug: Well those courses came about because people begged you to put something in that they could buy I think, so we’re grateful for it.
Mike: What I’ll also tell people is that I seriously do some consulting. It’s $200 an hour, and 90 percent of the people that want to consult, I tell them once they find out what they want to talk about, “Oh that’s in Real Estate Highlander” or “that’s in the management course,” and for twice that amount, you get unlimited follow-up. And two hours of consulting, you’re not going to get a fraction of what’s in those courses.
So I encourage people to buy the course first, do all of the follow up and consulting, whatever they need. And then at that point, if we still need to meet one-on-one, we can do that.
Doug: So that’s M-i-k-e-C-a-n-t-u.com
Mike: Exactly, and I’ve been told I win the award for the worst website on the Internet. But like I said, I have not been to my website in years, and years, and years. I have no idea what’s on there. Excuse me, but Kim runs all of that, and he’s constantly taking courses to the post office.
We do send them through priority mail, and I always instruct her to wedge everything she can as free bonuses in there, extra CDs. I’ve got some of my favorite talks I’ve done at real estate clubs. She usually wedges those in.
I’ve written several articles for the Morris Group. We always include those, so anything to make it a good experience we wedge in that two-day priority mail box.
Doug: Well that’s awesome. Thank you Mike for taking the time. We really appreciate it.
Mike: Okay. Doug it was a pleasure, and I look forward to talking again in the near future.
Doug: Sounds good. Take care, have a good one.
Mike: Okay, you too. Buh-bye.
Doug: Buh-bye.
Andrea: So that is it for this episode. Thanks again for listening. We hope that you enjoyed Mike’s wisdom as much as we do. He’s such a great guy, and we’ll talk to you next week.
Doug: Take care
Did You Like this Episode? Subscribe!
If you would like to learn more information from our Podcasts, check us out on iTunes & Subscribe. Also consider leaving us a rating (5 stars would be great) and a review would also be helpful so others can learn more about us and get in on our upcoming episodes.
For questions or comments please fill out the comments area below and we’ll answer them. Thanks!
