What I Learned From Mr. Wonderful
The lineup was packed. However, there was one person in particular that we were excited to see. Mr. Wonderful. For the past 7 years Christy has spoken at the highly touted Real Estate Ignite Conference in Las Vegas, NV. She's shared the stage with some of the biggest names in real estate and business. She enjoys speaking but the real fun is learning from others. With 2020 giving us so many unknowns, we were eager to see how the best of the best were adapting.
Kevin O'Leary of NBC's hit tv show Shark Tank (A.K.A. Mr. Wonderful) was a keynote speaker. As huge fans of the show, we were excited. Mr. O'Leary shared a bit of his personal story, how he began building his businesses and wealth. He also spoke on how his companies adapted to the new world that we are seeing caused by the global pandemic. His recent experiences have proven that American ingenuity is alive and well. Covid-19 has collapsed timeframes and forced us to use technology that was inevitable. We've adapted in a similar fashion with our business here in Columbia, SC. Virtual tours, zoom calls, our process for picking up Materials, how we meet with sellers, buyers, and others alike, it's all changed. But - there are some things in business that will never change.
The global pandemic was on everyone's mind. Mr. Wonderful addressed it. He spoke on how some of his companies adapted (and are now thriving). He gave us the pep talk that we wanted. Then he went back to being "Mr. Wonderful", the straight shooter.
In our business of real estate investing, funding is a big piece of the puzzle. On the the TV show Shark Tank funding is the name of the game. Entrepreneurs "pitch" the investors (the Sharks) on helping them fund their products and ideas. The sharks will take an equity or debt interest in return for their investment.
"When you take someone else money you have to consider yourself 2nd on the team."
Many people don't realize that Mr. Wonderful owns a lot of real estate. Real Estate makes up a large portion of his portfolio. Towards the end of the interview, this question was asked, "What advice would you give to someone who is looking for funding for their real estate deals?"
Here is what he said:
"When you take someone else money you have to consider yourself 2nd on the team. If investors feel that you are always putting them on a pedestal, ahead of yourself, you will always have the lowest cost of capital. When I invest in somebody I want them to understand the pecking order. #1 I want to get back my capital and #2 to get a return on my capital. People I’ve lent money to have always given me that confidence, whether they’ve said it to me specifically or show it with numbers, that I am on a pedestal ahead of them. They want to make me whole first and then them second. If you do that, if you understand that and it becomes part of your business DNA that you show respect to those who take risk with you, you will always have access to capital. It’s people who put themselves ahead of shareholders that end up having very difficult times and cant get support when your debt markets dry up. Build your tonality about who you are as an entrepreneur."
"Build your tonality about who you are as an entrepreneur"
That last line really stuck with me. "Build your tonality about who you are as an entrepreneur". In the case of lending it makes perfect sense. Our company uses private money lenders to fund many of our fix and flip transactions. Most of which we have used multiple times. Those people believed in us to get their capital back to them with a return. As Mr. Wonderful said, we make them whole first. We are forever grateful, but do they know that? They were put on a pedestal ahead of us, from a transaction standpoint. They had documents in place to make sure that they were paid back before us, but what about outside of the "business". What about from a relationship standpoint? Have I put them on a high enough pedestal? Without our lenders we would never have been able to get off the ground.
Then my mind started looking for other people to place on the "pedestal". What about our sellers? What about our real estate agents? Are we doing a good enough job of making them "whole" first. Yesterday on New Year's Eve our contractor was working at a job site until 7 pm. Have we put him first? I'd like to believe that he's working that late on a holiday because he enjoys working for us. He knows that we are worth the risk. Maybe he's working late on a holiday because he's building his own tonality as an entrepreneur?
2021 will bring about even more change. I believe that there will be more new businesses started in 2021 than ever before. Change can bring a fresh start. It also brings opportunity. Who are you as an entrepreneur? What tonality are you building about your company? Do the people that you work with feel as though you put them first? Those who do business with us take on an element of risk. Are you worth the risk and are you putting those around you on a pedestal that's ahead of you?
There will never be a better time than right now.
There will never be a better time than right now. Set the tone of who you are as an entrepreneur. Mr. Wonderful shared some great advice. His outlook on our country's future was encouraging. The "tonality" of who he is as an entrepreneur is very clear. While some might find him blunt and abrasive, we find him...Wonderful.