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SHOW NOTES FOR EPISODE 469: MAKING QUICK CASH IN REAL ESTATE WITHOUT MONEY, CASH OR EXPERIENCE
Yes, it’s true! You can become a successful real estate investor without money, cash or credit. In today’s podcast, real estate investor, serial entrepreneur, founder and CEO of Real Estate Worldwide Kent Clothier shares how he came back from being nearly broke to become a real estate titan.
What You Will Learn
- How the average person can still become wealthy in real estate with no experience, no money and no credit
- Why Kent will “take ignorance on fire than knowledge on ice anytime!”
- How to attract more money than you’ll ever need by reverse-engineering the buyer’s needs
- What opportunities second chances can present to make you better at who you are and what you do
- How the right automation, systems and processes can 10X your business growth
- 3 Effective real estate strategies for people starting real estate after 50
About Our Guest
Kent Clothier
As the Founder and CEO of Real Estate Worldwide (REWW), a multi-faceted real estate education company with headquarters in La Jolla, California, Kent Clothier educates and empowers customers using a curriculum steeped in award-winning and proven real estate systems used by Clothier and his team. Kent’s company operates 3 core business units: REWW Academy – an online real estate training platform, SMART – an online marketing platform that provides access to data to create lead lists for buyers, sellers, and private money and his exclusive brand, 1-800-SELL-NOW for local lead generation. REWW also operates an exclusive private mastermind for more than 150 real estate professionals that meet quarterly, called The Boardroom Mastermind. Before REWW, Clothier was part of Memphis Invest, a family-run real estate company based in Memphis, Tennessee, that is one of the largest real estate investment companies in the country, having bought and sold more than 5,000 residential investment properties. When Kent is not spending time with his wife Seema and their children at their beach home in La Jolla, California, or on frequent family vacations, you can often find him following his other life passion of speaking at national real estate, entrepreneurial, or personal development events and trainings.
More About Kent
- Just turned 50 this year
- At age 17, he started in business with his father in his arbitrage business
- They bought and flipped surplus grocery supplies from manufacturers that would try to sell excess inventory from grocery stores, sellers and distributors all around the country. This would create massive price discrepancies and opportunities across the country
- Grocery stores have 40,000 items. For example,
- In Miami, a case of Gatorade sells at $40 a case
- In NY, the exact same case is selling for $80 a case
- They found a away to buy a truckload of items in one market and ship it to another market and make the spread
- He initiated a “reverse-engineered” approach
- He went to every single one of their buyers and asked them:
- What do you want to buy?
- How much do you want to buy of it?
- What do you want to pay for it?
- What city do you want me to deliver it to?
- When do you want me to deliver it?
- Just tell me what you want
- He went to every single one of their buyers and asked them:
- From that information, he worked backwards to create opportunities for the buyers and brought it back to the,
- By the time he was 23, he was running a $50 million a year company
- By the time he was 26, his company was bought out by a much larger company in Boca Raton, Florida
- His dad retired and Kent moved down to Boca Raton to run the much larger organization
- At 27, he was running an $800 million dollar company
- The company grew to $1.8 billion by the time he was 30 – 7th largest privately held company in the state of Florida
- The company still exists
- At 30 years of age, he wanted to get the equity he helped build in the company
- The negotiations didn’t go well and he walked out of the company
- He spent the next two years losing everything he had personally made- income, houses, cars
- Up to that point in his life, he had never failed at anything
- He went from millions of dollars to less than $4,000 in the bank
- He had burned every relationship and bridge on the way down – went through divorce
- When he was at his lowest, he saw an infomercial on real estate opportunities through flipping houses with no money and no credit
- Went a seminar at the Embassy Suites in West Palm Beach, Florida
- He was highly intrigued by what the speaker was presenting on wholesaling
- He ended up investing $1,000 in the program
His First Deal
- Real estate something he knew he could do
- He was also desperate and had no other option – he needed to make it happen
- His first deal was in Pompano Beach, Florida
- He got the lead through a classified ad
- He responded to the inquiry with no experience, following what little he learned in very brief trainings
- “I’ll take ignorance on fire than knowledge on ice anytime!”
- He was highly motivated, very little knowledge
- He got the property under contract but didn’t know who he would sell it to
- He found people who had had placed classified ads saying that they were looking to buy properties
- In less than 30 days, he flipped his first house and made $8,200
- He knew he wasn’t likely to find another deal like that so, he put on his “branding” hat on and created a company called 1-800-SELL NOW
- Started a direct mail campaign to absentee owners
- Because he experienced such great success and failure at a young age, he was able to rebuild but, this time, in a new way
New Priorities
- He recognized his mistakes and set out to do things differently
- He was a product of how he was brought up and what he knew
- He was focused on building up his first business at any cost – even at the expense of his family
- He took great pride in being the guy that was at the office at 5 in the morning and leaving at 7:30 in the evening – wearing it as a badge of honor
- As he started rebuilding his life and these businesses, he became intentional about never building a business again that didn’t serve me
- I wants to live life now – not someday when he retires
- He wants to be in the moment today – he wants to experience the things that matter today – his, wife, his kids, his family, his friends
- Part of this new life was a new location – so he moved from Florida to San Diego, California in July of 2012
- They have a house on the beach
- He walks (and sometimes skateboards) his kids to school
- He walks to work
Starting a Real Estate Business
- He applied the same “reverse-engineered” approach he used in the grocery business to real estate
- He went to all the buyers and asked the same questions:
- What do you want to buy?
- How much do you want to buy of it?
- What do you want to pay for it?
- Where do you want to buy it?
- Just tell me what you want
- For buyers:
- He wanted to find the repeat buyers — the people with all the money – but where are they?
- He started with the end in mind
- He went down to the County Clerk’s office and looked at all the real estate transactions the prior month and cross referenced to see if there was a mortgage, note or lien at the time of closing, those were clearly bank-financed properties
- If there wasn’t a mortgage, deed or lien, then it was paid in cash
- He went through all the transactions and started making a list of all the people who were paying cash for properties
- Then, he started sending letters to the people on his list saying, this is what I do and what don’t we get on the phone so I can start generating opportunities for you
- That approach was a game changer – he calls it reverse wholesaling
- For sellers:
- They spend a great deal of money on direct seller marketing where everything they do is data driven
- They understand where vacant properties are located, then they layer other data points on top of that
- They know properties that are vacant, owned by someone out-of-state, over the age of 55, etc. to increase the probability that they are reaching a true distressed seller
- From there, they initiate several different campaigns to make sure they “surround” that prospect with
- Direct mail
- Facebook retargeting (insuring that, if they are on Facebook or Instagram, they will see their ads)
- Outbound texting
- Outbound calling
- Over the next 18 months, he flipped 90 houses, making over $1 million – he was on his way!
- He remarried and his wife was pregnant and he wanted to spend more time with his family- his new top priority!
- So he got passionate about automating the business so it would require less of his time
- Leveraging his experience having built a big business before, he sought out to build a big business out of a side hustle
- Through automation, systems, processes and efficient practices, they were flipping several 100 properties a year
- The company evolved into Memphis Invest (recently rebranding into REI Nation)
- During the Great Recession, when most real estate businesses were hurting, his business was thriving
- The reason they did so well is because they didn’t need banks – everything was funded through private investors
- They now have flipped over 10,000 properties and average 800 per year and manage over 6,500 properties for investors
Launching Real Estate Worldwide (REWW)
- As their success became public, Kent was asked to speak at around the country and train and coach people on how they did what they did, share the tools they use
- He formed Real Estate Worldwide, a multi-faceted real estate education company with headquarters in La Jolla, California, where Kent educates and empowers customers using a curriculum steeped in award-winning and proven real estate systems used by Clothier and his team.
- He has trained over 60,000 investors over the last 14 years, sharing the systems and processes they have successfully used for the last 17 years
- Kent’s company operates 3 core business units: REWW Academy – an online real estate training platform, SMART – an online marketing platform that provides access to data to create lead lists for buyers, sellers, and private money and his exclusive brand, 1-800-SELL-NOW for local lead generation.
- Today, he primarily runs the software and educational side of the business
Biggest Mistakes
- Arrogance
- Today, there is such good data that you really don’t have to guess
- If you use the data right, you will make money
- The days of believing you know more than you know are over
- An investor that is new to the game, can ramp up quickly today because there are mastermind groups, tools and resources to help you succeed
- His biggest mistakes (besides arrogance):
- It took him 3 years to hire a mentor
- It took him 7 years to get into his first mastermind
Biggest Successes
- Experience and perspective to understand that life is meant to be lived and that I can actually build a business to serve me
- That I didn’t have to be the guy that is running around, having to have his hands in every pie
- Being willing to empower the people around me by giving them enough time, training and control
- Having had a second lease in life, to become acutely intentional and clearly understand the outlook I’m looking for
Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years
- He recommends three passive strategies for old dawgs:
- Invest in turnkey properties
- Invest with your IRA
- Become a private lender
- Get a high rate of return
- Real estate in your security
- Buy a property and be the bank
- You take on the mortgage
- The buyer maintains the home and makes the payments to you
- Need a third-party servicer
- Invest in turnkey properties
Current Business
- His business makes real estate investing easy
- He has the gift to get people excited and motivated to change their lives for the better
- Showing people how to do that is very exciting for Kent
Rap-It-Up
- Favorite real estate book: This S*** Works by Kent Clothier and Rich Dad Poor Dad by Robert Kiyosaki
- Favorite business book: The Alchemist by Paulo Coelho
- Most valuable web site for success (other than your own): BiggerPockets.com
- Favorite app: Facebook or Instagram
- Favorite quote: “Action expresses priority.” – Mahatma Gandhi
- If you lost everything – all your assets – and had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? I would go onto Craigslist and find everyone that was trying to sell their houses. I would then by bandit signs and post the signs all around that says I’m selling a property for cash. Post the signs where the property is located, at major intersections with a stop light, to attract buyers and do a joint venture with the seller/wholesaler to generate $5,000-10,000.
How to Reach Kent
- Facebook and Instagram: @KentClothier.
- Website: KentClothier.com
- Business website: REWW.com
DISCLAIMER: Many of the above strategies take knowledge and have a higher degree of risk. You need to do your research and/or work with someone who is experienced to reduce your risk.
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