JOHN DESSAUER Master of Multi-family Housing,, With Jason Schwartz In Maui, Hawaii John specializes in multi-family residential income units . John is also author of books, “Real Estate H2O”…..2008
- [00:14 → 07:59]
Introduction and Concept of Real Estate H2O
- The session opens with Jason Schwartz welcoming John Dessauer a self-made millionaire and author known for real estate investing, specifically multi-family dwellings.
- John’s book titled Real Estate H2O: Quenching Your Financial Thirst in a Parched Economy is introduced. The metaphor of water is central:
- Just like drinking enough water is essential for health, having a balanced real estate portfolio is crucial for financial health.
- Conversely, too much water can be harmful (e.g., drowning, floods), similarly too much real estate or wrong investments can be detrimental.
- John explains his use of water analogies to explain real estate investing risk levels:
- Pool = Low risk: Suitable for beginners to gain experience.
- Lake = Medium risk: Intermediate investors gain more experience here.
- Ocean = High risk: Experienced investors take on higher risk but enjoy greater opportunities (e.g., water skiing, scuba diving).
- The conversation stresses the importance of due diligence and starting small to avoid being overwhelmed by complexity or financial risk.
- John emphasizes that real estate investing should enhance one’s quality of life, not diminish it through stress or mismanagement.
- [08:00 → 16:51]
Book Structure, Teaching Style, and Life Integration
- John describes his book’s design: user-friendly, easy to read, and aimed at beginners.
- Topics covered include:
- Getting started in real estate investing
- Managing personal finances before investing
- Property management basics
- Increasing property value
- Top 10 common investor mistakes
- The book integrates personal stories and real-life examples, reinforcing that life experience is a powerful educator in real estate deals.
- John encourages investors to trust their intuition and gut feelings about deals or people presenting deals.
- Jason praises John’s teaching style for making complex multifamily real estate topics fun and accessible.
- John’s company, The Dessauer Group, hosts education-focused events worldwide, including cruises and conferences, and supports charitable causes such as sustainable village construction in Haiti via the Caring House Foundation.
- The group also runs weekly mentor-led conference calls focusing on key real estate investment ratios and practical advice.
- Upcoming events include the Multifamily Housing World Expo in Denver, Colorado.
- Website for further information: johndessauer.com
- [16:52 → 25:36]
- John shares his life story:
- Grew up on the South Side of Chicago in a single-parent household after his father passed away when John was four.
- Despite hardships, he had a positive childhood and learned early that success requires action and self-determination.
- Earned a basketball scholarship and graduated college in 1991.
- He critiques corporate culture, noting that it often promotes mediocrity and lack of control over one’s destiny.
- Inspired by a Times Square sign stating, “If you don’t control your own destiny, someone else will,” John embarked on entrepreneurship through real estate investing.
- Observing his family’s struggles and apartment living, he admired the freedom and control owners had, motivating him to pursue real estate ownership.
- He left corporate life approximately 8–9 years prior to the interview to focus full-time on real estate investing.
- Emphasizes that taking action—even without complete knowledge—is the key to progress.
- Advises beginners to start simple steps like meeting a real estate agent to gain momentum.
- [25:37 → 33:02]
Investment Philosophy and Approach to Deals
- John highlights the “Five Freedoms” he seeks through entrepreneurship:
- Time Freedom
- Money Freedom
- Physical Freedom
- Relationship Freedom
- Spiritual Freedom
- He credits real estate investing for providing these freedoms, allowing him to travel, write, and give back.
- John compares his investment selection process to an NBA draft: not focused on property type or size but on the “best athlete”—the best deal based on numbers and potential.
- Investment deals vary from duplexes to large apartment complexes, chosen strictly on analytical criteria.
- John stresses separating emotions from investing decisions:
- Unlike some owners who personify their buildings as “children,” investors must focus strictly on numbers.
- Emotional attachment can cloud judgment and lead to poor decisions.
- He uses financial ratios and formulas as objective tools to make investment decisions, emphasizing that if the numbers don’t work, the deal is rejected regardless of aesthetics or personal feelings.
- [33:03 → 41:35]
- John advises that if a deal “looks too good to be true,” investors should increase their due diligence rather than dismiss it outright.
- His book and teachings emphasize the importance of skepticism and careful analysis in high-return opportunities.
- Discussion moves to current economic conditions (circa 2008):
- John compares current crises to past market cycles (fuel crisis in 1974, savings & loan crisis in late 80s/early 90s, post-9/11 economy).
- He believes market downturns are cyclical and inevitable in capitalist economies.
- Predicts oil prices will stabilize or decrease by the end of the year, barring major geopolitical disruptions.
- Regarding the real estate market:
- 2008 is a difficult year, but 2009 is expected to show signs of recovery with stabilized prices and reduced inventories.
- Loan availability will remain tighter than pre-crisis but will improve.
- On mortgage challenges and foreclosures:
- Advises affected investors to proactively communicate with banks to explore loan modification programs rather than avoid the problem.
- Banks prefer working with borrowers to avoid costly repossessions.
- Taking action is critical to solving financial difficulties.
- John emphasizes that real estate investing requires work, problem-solving, and mental discipline—not simplistic or “easy” money.
- [41:36 → 47:47]
Opportunity in Crisis and Encouragement to Take Action
- Jason shares a personal story of a pre-construction deal in Florida affected by mortgage issues, which was renegotiated successfully with the lender.
- John sees the current market turmoil as a historic opportunity:
- More millionaires will be created now than during the previous boom years.
- Investors who can solve problems and act decisively will profit.
- He reads an inspiring analogy from his book about two market researchers assessing a shoe market in an undeveloped country:
- One sees “no market” because no one wears shoes.
- The other sees a “great market” because no one wears shoes yet—representing opportunity.
- The message is to turn negativity into opportunity and develop a problem-solving mindset.
- John advises that following the crowd during downturns leads to poor results; success comes from contrarian thinking and creativity.
- Jason and John conclude with mutual respect and acknowledge the importance of giving back, referencing their shared humanitarian interests in Haiti and beyond.
- [47:48 → 50:02]
Final Thoughts and Call to Action
- John’s final message to viewers:
- Despite economic challenges (high gas prices, tight financing), there is opportunity if one takes action and thinks creatively.
- The key question when facing adversity is “So what now? What am I going to do about it?”
- Becoming a problem solver and innovator leads to success in real estate and business.
- The interview closes with appreciation for John’s insights, encouragement to read his book, and an invitation for viewers to engage further with his teachings and events.
- Book availability: currently at johndessauer.com, soon to be in Barnes & Noble and Borders.
- The conversation highlights the importance of combining knowledge, intuition, and action in real estate investing.
- The interview ends with warm aloha greetings and openness to future collaborations.
Key Insights
- Start small and gain experience before moving to higher-risk investments.
- Separate emotions from investment decisions; rely on analytical tools and financial ratios.
- Taking action, even without complete knowledge, accelerates learning and success.
- Market downturns create unique opportunities for those willing to think differently and problem-solve.
- Due diligence increases as deal attractiveness increases; skepticism protects investors.
- Entrepreneurship in real estate can provide multiple forms of freedom and control over one’s destiny.
- Giving back and humanitarian involvement are important aspects of sustainable success.
Recommended Resources
- Real Estate H2O: Quenching Your Financial Thirst in a Parched Economy by John dessauerer
- The dessauerer Group: Educational events and mentorship programs
- Website: johndessauer.com
Closing
This interview provides a comprehensive and practical overview of real estate investing philosophy, risk management, and the mindset necessary to thrive in challenging economic environments. John dessauerer’s use of water as a teaching metaphor makes complex investment concepts relatable, emphasizing balance, caution, and the importance of continuous learning and action.
Transcript
i’m jason schwartz and we’re here in the beautiful maui coast hotel with dare i even need to say it john dessauer john aloha welcome to our show how are you not only welcome to our show welcome to
03:02
maui beautiful place unbelievable well you know john is so well known to the group i purposely wore this shirt thinking that john might wear a hawaiian shirt but it’s my nouveau reef shirt now Nouveau Riche is an interesting there’s a real estate education company on the mainland and nouveau riche of course which means new rich that’s you we’ll talk about that this man is a self-made created millionaire who wrote a book one of uh upcoming series real estate h2o quenching your financial thirst in a
03:37
parched economy john dessauerer that’s so relevant today right economy parched i think torched is it a torched economy that’s the next book yeah that’s right yeah the burning bush that’s why i know i know okay well john let me ask you a quick question i see you’re uh almost as big as the bottle so this isn’t real water that’s right it’s real water yeah yeah real water and you’re as big as the apartment buildings you know you call that a giant in the industry i was gonna say you are a giant
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in the industry standing out among men why did you call the book real estate h2o um you know i wanted to give the book a little bit of flavor almost and i wanted to give it an idea that everyone can relate to when i looked at picking a title for it i thought you know that kind of cool if we called it real estate h2o and every chapter would start out about facts about water and those facts would kind of uh merge into ideas of real estate so for instance you know you want to drink eight glasses of water a day to
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be healthy right you need so much real estate in your portfolio for you to be financially healthy but the flip side of that is you know too much water and it could be detrimental to your health drowning hurricanes floods things like that so too much of real estate at one time in the wrong type of real estate or the wrong type of deal could be uh dangerous to you so i took those ideas and i and i uh kind of merged those together and created the book and it’s it’s a really interesting book i think it’s a
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great easy read gives you a lot of foundation on real estate investing and it’s it’s a fun book to read too i happen to have seen an advanced edition and had a real enjoyable time reading it because it is so comfortable and casual now i met you when you were teaching a significant course on multi-family dwellings and by the way he is so fun in class you know when you’re we’re doing something and you’re learning a lot but all that knowledge just sort of sneaks up on you go god i’ve learned a
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lot john makes it fun and easy and anyway to be continued when i think about you i think about the fact that this is fresh water this is perfect for maui because we’re surrounded by a lot of salt water with a few sharks here and there are that we don’t have sharks i know but um you really have to have knowledge and apply it you know the words due diligence right now when you’re out there in this real estate market quenching your thirst can happen but if you drink the wrong kind of water
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you have to really know what you’re doing i’m sure before you yeah go buy it yeah there’s there’s that old saying uh sailor’s proverb water water everywhere but not it needs a drink right yeah and um you know when you look at water you can look at a swimming pool which is a body of water and the swimming pool is one that you could swim in and dive into but you couldn’t fish you couldn’t really snorkel and get a a have a fun time with that you couldn’t go scuba diving you couldn’t
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do some of the other things that you can do on the ocean but there’s less risk in the pool so that’s what you have to look at with regard to real estate investing as i advise people i like them to start out small so you know what get your experience of in the pool swimming so on and so forth then you know kind of go to a lake to get a little bit more experience and the risk is a little bit more than a pool but not as much as say the ocean and then once you get to be an experienced investor you’re out in the
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ocean and yes there is more risk but you get to do more things like uh fish you get to uh scuba dive you can uh water ski you can do all kinds of things i’m just switching this this is live tv this is like okay and so that’s how i kind of explain risk and due diligence and understanding once you have that understanding of what you’re getting into be it water or real estate you can kind of judge from there and exercise that risk like a muscle and as that muscle gets stronger you can bring
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in and tolerate more risk well you know i’m hearing that it’s triggering in me a realization again i met you in this in this education environment and you were a level 400 class you were an advanced class but what you say i mean you should maybe have a 101 primer for people you know there’s a class they have called buyer beware but um i think you really just said it clearly there are different spots to be going swimming if you’re swimming in water and uh if you go in the deep end of the pool
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there are things that can happen that you really don’t know like jumping in and doing um 20 unit 30 unit apartment building when you don’t know how to fix a toilet and don’t know how to manage a manager sure yeah there’s like i said i think the biggest issue for most people when they start out in real estate investing is you know they they hear from somebody else you know what the ocean’s fine you’re going to be fine there there’s nothing that can harm you you know i’m right here to hold your
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hand and then all of a sudden you jump in the ocean and you look around there’s no one around you all of a sudden you feel the turbulence and so on and so forth and it’s that’s not the problem in itself the problem comes in when it takes away the quality of life from the other things that you’re doing and you know as i tell people you want to get involved in real estate investing to turn your life around and not turn yourself upside down and you know so so much of what real estate
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investors do are activity they take action they’re doing due diligence they’re doing their research and if you’re really truly passionate about real estate you’ll find that it it blends in with your life but when that thing gets upset meaning you’ve jumped in the ocean and there’s no support and you’ve got to consider the possibility of drowning or meeting up with a shark or you know some of the other things that could happen in an ocean it starts to affect your quality
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of life and and that’s why i really want people to start small and grow and once they get the experience uh they can grow into the ocean rather than being thrown into the ocean and worrying about some of the things that uh you shouldn’t have to worry about as a beginning investor don’t you like us talking about water i mean it’s not a dry subject you know what i mean no that’s why we use water but i thought real estate investing water you know we’re here but it’s a great thing
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because you know what you’re talking about these are really serious topics because people that get involved in real estate they say well i got twenty thousand dollars there’s a house i can buy out of foreclosure for twenty grand and then they get in and even the house that’s totally twenty thousand dollars yeah oh you gotta fix it up what if the tenant doesn’t do this or that or the other thing it’s it’s quite an experience yeah so how did you design your book did it have it was a river huh you had a
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destination what’s your destination and where were you going as you were going well yeah i wanted to do it’s my first book i’m writing my second book now about 70 complete with that and i want to tell you you know when writing a book a lot of people pay a lot of money for therapy and if they would just sit down and think of a book that they wanted to write i believe everyone’s got a book in them somehow some way if they’d sit down and write about book about what they’re passionate about you
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would not believe the money you could save on therapy because it really is a therapeutic situation but you definitely come through loud and clear here i can tell it’s you you know i i um i thought about the book and i thought you know let’s make this user-friendly it’s an easy read but let’s get some key topics across that people can absorb and start to you know consider as a beginning real estate investor so we cover topics of what to do to get started what you have to do in your own personal financial situation we
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cover property management a little bit we talk about increasing value in the deal the top 10 mistakes i think investors make when they’re looking at real estate so we cover a lot of different topics and i really just laid out the book to to be a basic thing to help people as a a starter book almost or starter kit to get themselves rolling i infuse the whole thing with a lot of stories and and examples on either deals that i’ve done or stories from my personal or family life and and again i think i’m i’m um
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maybe a little bit different in with some of the things that i teach right i like to bring a lot of my life experience in there that’s what real estate investing is um i tell people use your life experience that’s going to be your best educator in doing a deal if it doesn’t feel right don’t do it you know you’ve got experience now what are you now 22 23 now 24 okay we’ll go with 24. so you’ve got 24 years of experience of knowing what it’s like to live in a piece of real estate some kind of real
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estate an apartment a tent a mobile home a house a mansion use that experience what does it feel like you know what it’s like to deal with people negotiate communicate to people be it a parent a sibling a friend a business partner a boss use that experience when dealing in real estate if somebody’s presenting a deal to you and you think you know something’s not right about that person that’s telling me the deal something’s not right about the deal it seems too good to be true
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and your gut is telling you that your gut is probably giving you the best indicator that that may not be the deal for you well you know arielle is really good at that arielle is able to smell a deal just she just has that feeling she’s really been intuitive about it yeah and you that’s a good way and a little knowledge doesn’t hurt i mean look at that the nuts and bolts what i’m hearing about this in your book you know my experience of you is that the advanced class i mean multifamily
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you made it so easy i literally i don’t want to say it too loud but i throw out a lot of other things now because of having taken your class but i had to go through the learning of them to be able to appreciate the difference right between what they are and what what you’re teaching so this book is a great thing that we don’t see of you in class you throw it out there but this really goes into goes into the deep end of the pool sure sure uh you know in in that class that you’re talking
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about we cover a lot of topics with regard to multi-family units apartment buildings in this book i cover more of a real estate in general single-family houses and apartment buildings and basically what you have to do to get your own personal financial house in order before investing in real estate so it’s a lot more generalized a lot more basic and a lot of common sense things like when you’re talking about how to manage managers and how to manage situations how to um have people show up when you have
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appointments with them yeah really really good very friendly and easy to read i’m sure this is going to do really well if you guys see real estate h2o pick it up have a drink there you go drink it up as i tell people now besides where i saw you at new varish you do your own thing you i’ve seen regular um things from you all the time that’s how it grows we do my company is called the death sour group and we do events all over um we i never considered myself uh much of a world traveler until i created my own
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destiny in the companies that i own now i find myself traveling to areas like maui how beautiful is this uh meeting great people and uh it’s almost like you know when you control your own destiny as an entrepreneur um and you travel you come home with stories when you travel as a tourist you come home with trinkets so you know here i am in maui and and uh with jason and and uh probably gonna have some stories from this but yeah we will we do a lot of our own uh events i like to infuse a lot of life
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situations in them so you’ll see a lot of our event events on cruises or uh in really neat locations and we’re really involved in a lot of foundations we give quite a bit back i just got back from haiti which i sit on the board of directors of a foundation called the caring house foundation we build sustainable villages and third world countries and we need one here we have an extreme shortage of housing well it’s you know it’s interesting as i got more involved in this um and i’ll
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get back to the death star group i guess in a moment but as i got more involved in uh the giving portion of what i do i really realize that you you don’t feel more alive than when you uh participate in something that the rest of the world forgets and places like haiti and areas in africa where uh the sudan darfur you know just desperate desperate basic life necessity uh things you you just you never feel more alive when you’re you’re focusing and working on those things so it’s a
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real important part of my life and uh the deaths however group with what we do our events are really education driven we like to give a lot of educational content we’ve got different programs mentor programs that start out with basic conference calls we do a call every single week yeah i enjoy it people get on uh you’re on the course yeah i get on and off we are i’m called out but when i i when i can and i’m near your time we cut we cover some great great topics yesterday we uh focused on
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uh the four ratios that i teach that you probably i do noi yeah right uh well cap rate cap right cash return on investment croi okay total return on total return debt service coverage ratio see these are important things you know they were multi-family but i would have loved to have applied them in my residential purchases also yeah and we try to in those hour calls per week we cover content so much of conference calls are driven to other people’s objectives and what they want you to do and you know i
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want these calls to be educationally driven the best part of those calls by the way and that particular program is called the um achieve program the best part of those calls are when the rest of the members of the group which we’re somewhat of a close-knit group you know but the rest of the members of that group ask specific questions either about deals or about real estate investing when you have the question you know someone else probably has the question in the group so that’s a good portion of it we do things
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we’re going to the multi uh family housing world expo in in denver colorado in september as a group um a lot a lot of really cool things so so uh if you want more information uh we’re gonna put up the website johndussauer.com john desaler d-e-s-s-a-u-e-r you got it dot c-o-m they know that yeah sure but uh you can certainly go there and find out all the info on that okay john desaler besides being a charming and handsome and rich young millionaire is also self-made i i think people would
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like to kind of hear your story because i don’t seem to admit it they thought i was only 24 but i’m actually i’m older than you can you imagine anyway but i know that you discovered in your life this path well you had some time to do it so many of you out here who are my age are saying great you have to learn about that i have to have something for my retirement what is how can i retire but many of you are young what would it make a difference in your life while you were young you could do
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this and take it over time and build that portfolio based on the knowledge well um i started out the son of two poor sharecroppers i’m just kidding jason uh three three um no i i grew up in chicago on the south side of the city and my father passed away when i was uh young at four four years of age and um you know that’s traumatic in itself but then when you look at the family unit and what has to go on and survive there as a mother a single mother raising four children and and doing the things that they need to do
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it it you know becomes a little bit of a desperate situation but as i remember i always had a great childhood we always didn’t have everything but i had a great childhood and um i think uh i had to go back to haiti a moment when i was in haiti a month ago all these children that have nothing had smiles on their faces like you would not believe right and there’s something to that you know um but uh so you know i grew up in a great environment always didn’t have everything and i think that kind of
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instilled in me the the um uh the fact that you know hey if you want it you’ve got to go get it simply take action and and i think you can create what you want i i was other people that had a lot more than we did but i realized quite early on that if i was going to have that i was going to have to create it i don’t want to say there was a competition but it was almost a competition in me to make that happen and i know it sounds kind of cliche um but i went to college it was lucky enough to get a basketball
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scholarship and played basketball in college and had a great education i graduated in 1991 which as i tell people there was some kind of management shift that went on in 91 where you know if you if you were to keep goofing up they were going to promote you you know that’s how middle and upper management goes i think we got a president that way yeah i think well that was the first one of those we’ll leave that to the next show but uh yeah you know it seemed like in in life the corporate world politics the
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more you give up the higher you go and uh i realized that i realized early on as i i moved up in that world maybe i was goofing up too much but that that was not an area that i wanted to be i remember speaking in new york city several years ago and saw a sign in times square that said if you don’t control your own destiny someone else will and i i thought about that a little bit i remember seeing that sign and i i was kind of taken back like that i said that is so true so much of today uh what we do either as
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investors or as in business uh we put our destiny in someone else’s hands and more times than not that doesn’t work out the best it should so um i often uh tell people uh to ask themselves a question are you using leverage or are you someone else’s leverage and when you’re someone else’s leverage you’re always battling the idea of somebody else’s objectives and when you’re using leverage such as in the investment world with say apartment buildings when you’re using leverage you now have
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other people working for you if you go out and buy a 24 unit apartment building you’ve got 24 tenants going to their job to give you the most important check of the month i like that i grasped that at a fairly young age um and probably not as early as i should have but i was uh grasped at a fairly young age so what i ended up doing was i left the corporate world and i immediately started the process of becoming an entrepreneur um and my entrepreneurial path was through real estate investing now that’s
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led to some other things that i do today but um my pathway was real estate investing i love the fact of being an entrepreneur as a matter of fact one of the things that sparked that because of our family situation growing up i had always lived in apartment buildings the first house i ever lived in was the first one i bought for myself and my family so uh i re i can remember as a kid seeing that owner of that apartment building seemed to have more of a freedom than my mother did when she was working two jobs sometimes more
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and i said you know i want that in my life i learned that as a lesson i don’t know how he did it but i got to have that and that was what the almost the motivation was for me so i left my corporate position and that was about 1990 it was about 2000 i want to say it was about eight years ago nine years ago and um really took action and made the commitment to take action and and i took action even when i didn’t know exactly what to do and i know that sounds a little bit funny but what i realized
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was and what i’ve learned today is even when you don’t know exactly what to do if you just take some kind of action you learn so much quicker so for instance if you didn’t know anything about real estate investing in the apartment market and you said i don’t know what to do just sit pause and say what would be the first if i didn’t know what to do what do you think i would do and i know this sounds kind of crazy like i’m talking to myself in my own mind and you sit there and you say well
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probably the first thing i would have to do is talk to somebody that sells real estate like a real estate agent a broker so i’m just going to go set up a meeting with a real estate agent or broker that’s the it’s as simple as that that’s how you start and you take action i’m getting excited i’m spending here jason but uh it’s as simple as that you take action in that method and what i found is you are able to accomplish so much more and people second yesterday like how did you
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know how to do all that how did you how did you accomplish that i simply just took action even when i didn’t know what to do i did something and that’s probably made the biggest difference from where i was then and where i’m at today and really the fruits of that labor the fruits of that action has been um you know some of the things that i talk about in the book which is uh really a free five freedoms you know hawaii in general is a very spiritualistic very um uh touchy feely type type of of thing
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earthly and one of the things that i realized is the the things that we strive for when we’re working in the corporate world or wanting to become an uh an entrepreneur is you know we want time freedom we want money freedom we want physical freedom relationship freedom spiritual freedom and the only way to get those type of freedoms is to control your own destiny and uh you know today i’m able to like i said before travel meet great people be on great shows write a book this this book uh actually
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is is the uh product of the uh time freedom that i had most people don’t have time to write a book therefore they don’t most people don’t have time to do yoga or you know meditate or do some of the things for spiritual freedom therefore they don’t so in creating that situation for myself i was able to receive all these these benefits and it just seems like the more leverage i had in my life the more apartment buildings i buy the more of those things that i can get because of other people um
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going to their nine to five to cut me that check may i talk a little bit sure i’m sorry yeah you’ve set up a i was gonna say a small emperor i don’t know but i mean just on today while we’re getting ready john is you know making offers on a couple of places quite a spectrum of properties both apartment buildings one small and one like it’s an apartment building in a large building so you’re dealing all kinds of markets and you’ve acquired and built a small empire i um
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yeah i have uh and you named your children so you can give them each an empire that’s right peyton and jordan that’s right uh jordan and peyton peyton and jordan are my daughters yeah 16 and 14. and for those of you that have daughters out there you know that i’m i’m probably a little bit challenged coming home and the house be full of estrogen and emotions and things like that but uh i i very much attribute my investment style to what i think happens in say the nba draft i know
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there’s not an nba team here in hawaii but a lot of times in the nba draft national basketball association instead of drafting a center or a guard or a position player they often draft the best athlete and i look at that as my investment criteria when i’m looking at deals i’m not specifically looking for a hundred unit complex or a four unit building or a duplex i’m looking for the best athlete so when i put the numbers through my system and the results of those equations or formulas tell me that this is a good
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deal that’s the best athlete that i can drive or buy at that time so i go for it um so you know and the deals that i look for could be an eight unit building could be a duplex could be a 148 or 180 unit complex and that’s kind of been my criteria all along as i’ve been able to acquire multi-family units do you uh keep buildings around as projects i know a lot of people get real personal about their buildings or do you look at them as part of your business do you ever make them personal besides your home and
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maybe you know it’s interesting um i was dealing with a woman one time where i was buying i wanted i was looking at buying her two apartment complexes and they were a couple elderly didn’t have any children and they considered the two apartment complexes their children and uh they were immaculate uh so on and so forth the problem with that is that they wanted an exorbitant amount of money because they were their children attached to their children yeah as an investor uh you cannot get emotional about the deal you have to
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keep the emotions out and focus solely on the numbers uh you’ve got to be able to walk away from a deal at any time you’ve also have to be able to understand what those numbers are going to give you and what your play is on the property and i think if you can kind of swim your way through that and and understand you brought out the winds yeah okay and and swim your way through that you understand you guys don’t mind a little squeaking isn’t that funny how about that well that was good all
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right uh but once you get able to do that you can now find a way to make good investment decisions keeping the emotion out of it and really separating yourself as an investor from other people that is huge separate yourself as an investor from other people so many people whether it be apartment building i brought it up for a reason they get so attached to the house unless it’s your dream house you really have to look at it extremely analytically because if you look at the numbers that’s going to
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it gets much more clear i think that was what most attracted me to your strategies is that you boiled it down to science it wasn’t an emotional choice a very very important lesson the the one thing that i think most investors need to understand that is that investing is a it’s a very cognitive thing where you’re putting it through almost a machine and the product or what comes out of that machine is going to tell you what to do my machine are the ratios that i talk about the formulas that i use to
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look at a deal and the results or product of that those formulas tell me exactly what to do i never let my emotions get in it so i never look at an eight unit building and say oh i love that building the brick is so beautiful the landscape is gorgeous i gotta have it if the numbers aren’t there i don’t buy it right so and i like your other comment that you make you know i appreciate the personal time getting to share if it looks too good to be true look harder it might be a great deal but look harder
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the level of due diligence quotient should go up or the factor should go up as the opportunity is looking better i would think when you look at a return on an investment and you look at the idea of what you’re getting in return for putting up some cash or putting in some money into a deal and you get an exorbitant return right from the get-go typically something’s going on there so what i tell my students or people that i work with is proceed with the deal but proceed with caution you know it flows throws up some
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red flags a little bit so um you know usually you’ve heard that saying you know it seems too good to be true it probably is that that probably applies in real estate very well not that you don’t ever find really good deals from the get-go because i don’t want to second-guess why a seller’s selling the property that way but right i just want to be more detailed with my due diligence and really find out what’s going on there and don’t be afraid to get a good deal because you’re second guessing that’s
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right i see that’s right well you know having read like i say the first version i know that a lot of what we’re talking and so much more is hearing your book and in the same kind of style like we’re talking very comfortable and real available you know sort of that’s right real estate h2o quenching your financial thirst in a parts economy i think we’re in a uh torched economy now i think yep um do you mind we sort of get more current events not at all i don’t know um what do you see going on and what do you
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think is happening here um you know it’s really uh it’s really an interesting time um i i’ve i’ve been able to i don’t want to say call what’s going on but i’ve been pretty close to it in the book i talk about a diagram that i when i talk about timing markets and market cycles and things like that fish you probably remember that that was a very important i think you almost started the whole thing with that yes to let us know the cycles yes this has happened before in our economy
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where we are right now and i think americans have a a a short memory but if you go back you know and you can go back probably since the beginning of time but if you go back just from uh an aspect of just go to 1974 you know we had a a gasoline shortage uh a fuel and oil and an energy crisis then do you remember that i know we have a new one yeah no shortage maturities of shekels that’s right and it was a shortage of gasoline i know they talk about supply and demand today but it was a little bit
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different time but that really affected our economy you remember the you know lines of cars at gas stations and probably remember that from new york right well you know i’m a renewable energy advocate from way back when i can’t imagine how a whole generation went by and we didn’t do anything that we had so abundantly in our face but do you remember how fast that dissipated if you remember you know 75 76 it just kind of dissipated and typically in market cycles that’s what happens we
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seem to forget a lot of those things so it happened in 74 it happened again in the early 80s when we had high interest rates 18 and you know really affected the economy in a in a drastic way uh the late 80s early 90s actually we had the savings and loan crisis you know very similar to today with the banking uh industry um now we do have a little bit of the double whammy with the oil and the the banking today but yeah uh it happened again in 2001 with the the unfortunate terrorist acts and we as a country go through this and the
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reason that we do is because we’re capitalistic in nature we have to have market cycles with what we do as being a a capitalistic economy if we were a socialistic economy we’d be flatlined it’d be very boring and you know we wouldn’t be able to you know do the things that we get to do as americans and have our freedom but interestingly enough here’s what i think is going to happen i think oil is going to come down in price i think americans have made some some different choices with respect to what they do on
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a daily basis i think that’s gonna start to affect that uh demand side of the equation so i i see oil getting back to about a hundred dollars of a barrel by the end of the year now i’m on tape so you’ll you check december 31st and i bet you were around 100 a barrel i think in 2009 as we move through there uh when we get to the spring summer time period of that will probably be even around the 70 mark uh for that reason now again you check and see if you see these shades move that’s the judge we’ll
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be able to tell that yes yeah you guys you guys let me know how if i called that right now that’s excluding any like significant act of war terrorism things like that that would adjust that if we don’t have any of that i think we’re going to be fine the other thing with respect to the real estate market and that’s a question i get all over no matter where i travel is i think the real estate market is is in 2008 going to remain how it is right now there’s going to be no recovery in
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the market it doesn’t happen overnight it happens over a duration of time 2009 will start to heal that process uh 09 will be a much better year than 08 with respect to real estate inventories will go down prices will start to stabilize um it will not be what we just came out of by any means you know the high appreciation and the availability to get loans will just not be what it was but we will start to heal in 0-9 0.9 again like i said will be a much better year than 08. what about the so many people that have
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gotten kind of crushed by this recent mortgage challenge where now they can’t refinance their own houses and yeah i’m on a theme right now because i get that question a lot too and i think people get caught up in that own that that negativity yes it happened they may end up being a bad situation right now um and i think it comes to a point where you have to say so what now what so what now what am i going to do about it just like when i talk about uh being becoming an entrepreneur and taking action even when you don’t know
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how you might be in a situation where you have a mortgage you’ve got an investment property that’s not cash flowing rather than stick your head in the sand and try to avoid the problem let’s do something about it what would i do if i had a more if i had a house an apartment building whatever it is that wasn’t cash flowing what would i do well i’m going to take action even when i don’t know exactly how there’s not someone to my right or my left telling me exactly what to do i would sit there
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and say you know what the first thing i’m going to do is i’m going to call my bank and i’m going to say to my bank listen i got into this deal it wasn’t how it was set up the appraisal might have been bad something else might have happened what can i do from this point can you do you guys have a program and you know the people that do that find that the banks are willing to work with them because rather than take back another reo they would rather say let’s help you out of this process
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maybe uh eliminate the interest or reduce the interest on the loan suspend the payments for six months till the property gets stabilized there’s all kinds of programs that they could go through so again in these times i tell people say so what now what what am i going to do about it let’s take action and and we’ll work ourselves out of this that’s what an entrepreneur in real estate they work this is not something you know like i was joking before we started it’s like when you start to hear the things it’s
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so easy a caveman can do it wrong it’s not what we do as investors we work we use our minds we create leverage we we we’re problem solvers and uh that’s how we’re gonna get out of this mess well i know i’m going to bring up a personal story generically how’s that i had that issue happen where we bought a pre-construction deal in florida and none of the buyers could qualify because of the mortgage problem the real estate agent that was getting us this house and selling it
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they bailed out of the industry and they gave us these houses back that was 20 something 20 months ago something like that and the lender worked with me and now they offered me a deal you know they talk about short sales and that you can’t renegotiate they offered us seventy thousand dollars less than when we bought the construction loan so it was actually it’s now a much more interesting investment because everything’s now been adjusted but couldn’t do that without the knowledge see to my pants plus a little
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knowledge that’s opportunity there right you in the even in this negative time you’ve got opportunity yeah the point that i i think everybody should know on this this show and and in this environment is more millionaires will be made in because of this situation than three years ago when the boom was going on two and a half years ago the the opportunity is here it wasn’t three years ago it’s here and um i gotta i’m gonna read something in a book okay the book here if i can if
43:10
this is cool we’re good i gotta remember the the page it’s on i think it’s on page uh there we go it’s on page two i just want you to read a little thing i’m speaking here as you know and i’m gonna start off my speech with this uh with this statement here uh once upon a time there were two market researchers who worked for a giant shoe company both were dispatched to a far-off underdeveloped country to gauge the market for shoes when the first researcher’s email hit the home
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office it read no market here nobody wears shoes the second researcher had a different take his email read great market here nobody wears shoes right and so you know those are the type of things that are in the book but um you look at that situation how many people today are saying oh real estate is terrible i’m never going to get involved i got burned you turn that negative situation into somewhat of an opportunity i would challenge people that are watching the show and others that if you can take these
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moments that other people are ignoring running away from putting their head in the sand and you become a problem solver you will make a lot of money in this environment i really believe that now is the time it’s not two years down the road it wasn’t two years before it’s right now i hope that makes all your real estate agents happy but also all you sellers all you potential buyers all about people out there with a dream you know i’m changing the subject a little out of real estate
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when i came to this island i wanted to contribute something i wanted to add something to and um this is the kind of thing that dreams are made of by being able to add just what john said here opportunity comes when you see it and created in any kind of condition if you’re going to a store when do you want to buy something when it’s on sale do you think that things might be on sale because you have a great deal of motivated sellers might be right and i hope that everyone can be positive and
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optimistic about what’s going on you know i i myself have gone through a lot of challenge from all that’s going on in the market and yet with the knowledge i got and with my ability because to be able to apply that knowledge and my innate like you say okay what am i going to do here this is upside down i can crawl to the side and wait for them to hit me or i can be proactive in that pro-activity i was creating more opportunity and um you know that’s hopefully a lesson we can all learn absolutely
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you know we can talk forever and i hope that we’re going to get some more conversation going on but we can’t take over the television for hours and hours i think i think the most important thing now is to give you a chance to say you know what do i want to be sure to communicate to the people of maui and the world because we’re also on the internet and maybe we’ll even be up on your page for a while sure uh you know i think the thing that i’d like to communicate today is the opportunity that we have
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uh with the uh market today you’ve got to take action you have to put yourself in a position to actually say those words so what now what yeah the economy is not the greatest right now gas prices are high um you know it’s harder to get financing okay we know those that situation is current what do we need to do about it uh is there another way do we need to get more creative on deals do you need to look at opportunities a little bit differently and i think if you put yourself in that state of mind and
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really become a problem solver you start to find ways to make money where no one else thinks you can and you know that’s probably the greatest lesson that i’ve seen is when everyone is going one way you want to go the other way so the reason that is is because how can you ever expect to get different results if you do the same thing that other people are doing and i just challenge people that are watching the show to to make a difference take action and and say so what in the face of this economy
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and environment here well words of wisdom from a very wise and very humble and very very nice man thank you thanks a lot for having me welcome so we were going to give john a shirt that says dream reese you know arielle and i have our llc dream rich llc cool but i don’t know if you’re an extra large you’re more like an extra extra it’s all the muscles that i get it’s muscles you know sure anyway so um we’ll see if this fits if not we’ll get one to you and bring it to you to
48:21
college well thank you very much i appreciate that this book is a must-have and really very comfortable i must tell you though if you bring it to bed to read and think you’re going to fall asleep it doesn’t do that to you it kind of energizes you it’s a good morning reading it’s great for relationships you know uh you know it sparks other romance in the relationship who needs flowers give a book that’s right and you can get it at johndus.com uh soon to be in barnes and noble borders so on and so forth but
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right now before everybody else can get it get it johnny.com you know it’s interesting when i think about this this is water there’s another instructor who i know is a friend of yours tony lister who has a program water weed repeat yes was he down there in haiti with you he was not no okay because he also spoke of haiti as an area that really needs help so um it’s really nice to hear that you who have so much and have accumulated so much are also aware that giving and sharing and you know giving
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back what a blessing we have we could be in a situation like that and so that’s really wonderful thank you for that you got it real estate h2o quenching your financial thirst in a parched economy john desauer it’s a pleasure john thanks again all right be well aloha and everyone thank you for joining us and um please if you want john back we will go and get them and bring them back here again or great or we’ll go wherever but i think yeah i think we should get you back here anytime anytime so we have a draw here
50:02
in maui so we’re going to do that thank you very much aloha
