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SHOW NOTES FOR EPISODE 119: REAL ESTATE INVESTING TO CHANGE THE WORLD
Frank McKinney went from high-school drop-out to Ferrari-driving tennis instructor to house flipper to multimillion dollar custom home designer to philanthropist who now builds self-sustaining villages for the poor of Haiti. In this episode, Frank shares his amazing journey and the things he has learned along the way.
What You Will learn
- How to go from high school drop-out to digging sand traps on a golf course to tennis pro to fix ‘n flipper to custom luxury home designer
- Tips for obtaining a “Masters in Entrepreneurship” while teaching tennis
- What it takes to be an expert at anything
- How two four letter words can kill your prospect of success ever
- Building a multi-million dollar home “on spec” without having a buyer
- How truly knowing what your customer wants can open the door to unlimited business
- What are “micro mansions” and why they may be the wave of the future
About Our Guest
Frank McKinney
Frank McKinney is a Real Estate Artist, 5-time International Bestselling author, superhero meets Robin Hood, Philanthro-Capitalist, Ultramarathoner, Actor, and Visionary who sees opportunities and creates markets where none existed before.
Now, Frank creates real estate markets where others fear to tread. He has built oceanfront spec homes (homes built without a buyer) valued in the tens of millions of dollars, shattering price records with each new project. Frank started with a $50,000 fixer-upper crack house, and climbed all the way to a $50 million oceanfront mansion!
Frank’s latest creation? His Micro Mansion – McKinney’s totally new concept in ultra high-end homes was just unveiled and is taking the luxury real estate world by storm!
Frank spends quite a bit of his time on philanthropic causes, specifically, his Caring House Project Foundation, www.chpf.org, a non-profit (501 (c) 3) organization that provides housing and a self-sustaining existence for homeless families primarily in Haiti and here in the US. By the end of 2016, a total of 10,400+ people will have been sheltered in Haiti alone because of CHPF, and thousands more are alive because of their efforts.
Frank was talking to Bill while in his ocean-front tree house he built 15 years ago, with 12 windows, overlooking the Atlantic Ocean. Wrote 5 books in this tree house
More About Frank
- Grew up in Indiana
- Kicked out of his 4th high school with 1.8 average
- Moved to Florida at 18, no hopes of higher education, $50 and duffel bag
- Got job as maintenance working at golf course, digging sand traps
- Surrounded by affluent people
- Was good at tennis and got a job as a tennis instructor, teaching beautiful women tennis, earning a six figure income and driving a Ferrari while still in his teens
- Met a lot of people who made their fortunes in real estate
- Would pick the brains of his tennis students on how they did it – earned his “Masters in Entrepreneurship” on the tennis court
First Real Estate Deals
- Did his first flip in 1987
- Bought for $30K
- 620 sq ft
- 2 bed/1 bath
- Crack house
- Bad part of town
- Made $7K
- First 5 years, did not buy a house worth more than $100K
- Author Malcom Gladwell (Blink, Tipping Point, and David & Goliath) said, “To be an expert at anything, you need to spend 10,000 hours doing it.”
- Frank did the math and 5 years, at 8 hours per day, 5 days a week, equals 10,000 hours. He saw that he had become an expert
- He also watched and could tell who was a good contractor and who was not
- He saw it was time for a nature evolution to a higher price point
From Flipper to Builder
- His next house was a $2.2 million house
- 1992 started building houses “on spec” on the ocean (in South Florida) – 42 houses
- Average selling price $14.4 million dollars
- Biggest house he ever built was 30,000 sq ft, 18 bedrooms, 22 bathrooms and a 16-car garage
- He and his wife (they’ve been married 25 years) take some of the proceeds and build self-sufficient villages in Haiti
Artist and Businessman
- He looks at what he does as creating “3-dimensional art on a sun-drenched canvas”
- According to Frank, “An artist’s pores ooze passion. And in creating ‘art’ I won’t buy the cheapest materials to create real art.”
- He knows what the ultra-wealthy wants before they want it
- This is verified by the fact that he will find a location, design and build a house first, before having a buyer and he has never had difficulty selling any of his “spec” houses
- He will do a “bubble diagram” and map out where rooms will go, how big, where sun rises and sets, amenities, etc.
Biggest Mistake
- Waiting too long to get started
- Fear and risk prevented him from getting started
Biggest Success
- Overcoming his fear to jump forward in real estate
- Once you take the step – the fear disappears
- Fear gets replaced by exhilaration and joy
Advice for Old Dawg Listeners Thinking of Getting Into Real Estate Investing
- Frank is a “buy at value and sell” investor and that approach needs to supplement “buy and hold” strategies
- Become an expert on your area
- Join a local real estate investment club
- Drive around your neighborhood (within a 5-mile radius) and look for the common sense tell tale signs of distress:
- Two weeks of uncollected newspaper
- 2 months of uncut grass
- Broken screen and windows
- Mailbox knocked over
- Get a realtor involved so you know you are not overpaying and that there is nothing wrong with the house. Buy it under market value!
- Frank’s book, “Burst This! Bubble-Proof Real Estate Strategies,” talks about how you do that
- You can try flipping or buy ‘n hold – see what you like more
What’s Ahead for the Future of His Business
- Micro-mansions
- For the ultra-rich who have multiple houses around the world but still want luxury
- 4,000-6,000 sq ft as opposed to 30,000 sq ft
- He has one for sale for $20 million asking price
Rap It Up
- Favorite real estate book: The Art of the Deal by Donald Trump
- Favorite business book: Charlie and the Chocolate Factory by Roald Dahl but read it from a marketing standpoint
- Favorite valuable web site for success: Read it For.Me
- Favorite app: Weather and Stocks apps
- Favorite quote: “Exercise your risk tolerance like a muscle. Eventually, it will become stronger and able withstand greater pressure.” Frank McKinney from his book Make it Big: 49 Secrets for Building a Life of Extreme Success
- If you lost everything and only had $1,000 in cash what would you do to rebuild it: He would go to the inner city and give it to the homeless and live among them. He is grateful for what he has received from God already and will not try to rebuild.
How to Reach Frank
- Frank-McKinney.com
- For other books by Frank McKinney, go here
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