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West: Good day, folks. I’m here with John Burley. We’re very, very privileged to have
him. Welcome, John.
John: Thank you.
West: John has obviously spent some time with us here at the Lifestyle Summit. We’re here
at Royal Pines on the Gold Coast. And John was just giving an awesome presentation to
our early group of traders. But for those of you who haven’t heard of it, John has
been associated with some big, big names in—you may have heard of Robert Kiyosaki and Donald
Trump and many other big names—and they’ve all come to John to basically get some of
his expertise. But I want to hear you, John, for about twenty seconds and just tell people
what you do and how you help people.
John: Yeah, I’m primarily a Real Estate Investor. I’ve been doing it twenty eight
years. I’ve done over 1200 property transactions. So I live in what I call the ‘real world’
rather than just seminar land.
West: Exactly.
John: And so what we teach is just spot-on reality; what’s going on today. I mean,
a lot of what we’re talking about is, you know, the changes in the marketplace, the
changes with interest rate. Certainly in America, we’ve had this humongous crash, I mean the
greatest crash since the 70s or the 30s, depending who you talk to. And so by just looking at
what we do specifically different in a down market, first the regular market and up market,
and it’s all based on reality what I’m out there doing every single day in our business.
Because still, to this day, I mean eight percent of my company, what we do is not just education.
Eighty percent of what we do is actually investing. And it’s what we do for a living.
West: That’s such a big difference from a lot of the other companies who just train
you and then just kind of leave you.
John: Yeah. I got tremendous respect. There are so many great educators out there, you
know, and I admire them. But you know what? A hundred, two hundred a day to year, all
over the place, teaching all time…
West: They’re not doing much investing, are they?
John: You can’t do much investing and that’s a lot of work but it’s not what I want to
do in life. So I prefer, actually, to make my serious calling investing. And educating
is just…it’s a lot fun. It’s a way to get back. We make some money doing it. Although
so many things we do, like the book Money Secrets of the Rich, we actually give a hundred
percent of the proceeds from the book to charity. I don’t keep any of it. You know, I always
looked at that like that was a gift to me from God—all these information—so I just
share it.
West: And you know, I have to say, I was telling John about the original grain-covered version.
John: Yeah, yeah. I got a couple of those.
West: Mate, you know, that’s one of the books that sit proudly in my library. So this
is a fantastic book. So John, why don’t you tell us, like the essence of what you
shared with us in the seminar out today?
John: Yeah, what we talked about was great. We talked about how in the United States we’ve
got—you know, things that aren’t really, really lined up, which is what I call a perfect
storm. We’ve got huge foreclosures which leads to massive negative emotion, massive
negative sentiment in the marketplace. Which, of course, means great, great discounts and
great, great deals. And literally, we were just talking about real, real property transactions
that we do. Houses that used to sell for 240k, 250k, they retail for about a 125K today and
I’m buying them in the $60,000s—for real—regular deals that we’re doing right now on the
street. And actually, a lot of Australians that will be working with us, doing those
deals as partners.
And then we talked about how, you know, you’ve got all these people that need homes. So we
do a lot of vendor financing, a lot of installment contracts to help people about home ownership.
You know, one of the great bright sides to all this downside is that most other investors,
because of their poor psychology, because of their poor training, they’ve left the
marketplace. We have very little competition. And on top of all this, you know, we’ve
got record-low interest rates going on right now in America.
And people… What’s low? 4½ % to 5½ %, 30-year fixed. To do that…again, we’ve got to
go back to the 1970′s to the 1930’s. We don’t know what happened in the early 30′s.
We’re literally looking at a 40-80 year opportunity. This is not a hyped up once in
generation. This is actually numbers that have come in alignment that only happen about
every forty years. And that’s where we’re at right now.
West: Wow. Insane. And the other thing I really connected with John was when he was talking
about ice cream and, you know, don’t go in there with just the container; don’t
leave with just the container.
John: Yeah. I mean, one of my favorite ways to looking a real estate Investing…
West: Cause everyone can relate to ice cream, right?
John: Everything relates to ice cream. Ice cream’s good. I like ice cream. So when
I look at real estate is I’m buying a bowl of vanilla ice cream, you know, and we have
fun with it. Say it’s fat free, calorie free, magic ice cream because ‘oh, I can’t
get ice cream because of the calories’ so this is magic ice cream. And whenever I do
a deal, I look at it this way: I’ve got to have ice cream in the bowl before I pay
money for the property. So let me explain what ice cream means. Ice cream means, if
I’m doing a quick cash deal, I’m not buying the property for 300 hoping it’s going to
400. Mate, that’s not investing. That’s luck. What I’m looking for is it’s worth
300 and I’m buying it for 200 and I’ve got people lined up who want to pay me 275.
That’s money in the bag; put the ice cream in the bowl.
Now, we had fun about no negative gearing. We had everybody up yelling and screaming,
“No negative gearing! No negative gearing!”
West: That was funny, that was funny.
John: Yeah, because reality is, folks, I hate to tell you but I’ll let some of you in
on this—actually, I’d love to let you in on this—real investors don’t negative
gear. [04:49] I mean, that’s just crud that the clients have come up and salespeople will
come up to say your real estate makes no sense.
Investments are supposed to make money. So if I’m doing a buy and hold transaction,
put ice cream in my bowl, to buy it, I’ve got to have positive gearing from the moment
I bought it. And if I’m doing vendor financing, installment contracts to cashflow stuff—like
what I do for the Kiyosakis—we’ve got to make sure we’ve got in is that my positive
income—my income I’m receiving—is greater than my expenses. And then I’ve got ice
cream in the bowl. And so we do that, we got ice cream. And then we make the ice cream
better. And then we add chocolate sauce.
West: The chocolate topping.
John: The chocolate topping is tax benefits.
But what too many people do is they buy a bowl with tax benefits, chocolate topping
in it and they hope the ice cream shows up later. That’s not investing. Anything we
do is we throw in with whipped cream. Whipped cream is the appreciation. I love appreciation
but you can’t count on it. And that mythical 10% or 20%—whatever the promoters are telling
you—it’s a fabrication.
The reality is Australia, as a nation, averages just under 4% per year appreciation. Do some
areas go up? Yeah. Do some have nice runs? Yeah. They also have nice collapses. And so
what we do is we only buy based on the money and numbers. The ice cream’s got to be in
the bowl meaning it’s got to be positive geared, it’s got to have an effect where
we get quick cash today or I can do it on vendor financing and make money today. If
I make money today, I’ve got ice cream in my bowl, I make money for sure. If I can put
chocolate sauce and whipped cream on top and get a sundae, I’ll do it. But I’m going
to make sure the ice cream’s on the bowl before I buy it.
West: Definitely, definitely. Good for foundations. So anyway John, you were telling us about
also some of the strategies that people can use to actually buy properties but mainly
also telling us about how you actually have the process and the whole system back in the
States. Because property in the States now is, you know, it’s the place to be.
John: It’s insane-low right now. I mean, literally, it’s a crash. Seriously guys,
we’re buying properties, they rent for $250, 000. The street value from today it’s $125,000,
they’re off 50. And I’m buying them for well below street price in the $60,000s and
the $70,000s.
West: Wow.
John: And what we’re talking about—one thing is Aussie Rob, why he wanted me come
out, is he’s been all over America searching for somebody who could do this. He’s like,
you know, “I need somebody who can buy properties for real, that for real make money, and have
for a long, long time.” And he found me. And he’s like, ‘wow John, you’ve been
doing this twenty years. And they make money for real.’ Every property I bought is positively
geared. I’ve done over twelve hundred (1200).
And so he’s like, “Do you work with investors?” And it’s like, “Mate, how do you think
I bought so many properties? I can’t sign for all those loans. Nobody can.” Even Donald
Trump can’t buy that many single family homes if the banks say no. So I do just what
all the big guys do: I work with investors.
And so what we’re doing now, we’re really excited is we’re working with Australians.
They come in, they’re putting up the capital, we buy the property, we get a fantastic rate
of return. We put in literally about a double capital gain profit that we lock in with the
contract. So then we’re buying it for $65,000, we’re selling it for $130,000 on the contract.
We got a $65,000 profit. We’ve got a great double digit cash flow plus the capital gains.
And then for a lot of people, what we do is, in the United States, we got what we do what’s
called seasoning. Right now, we don’t get our financing when we buy. We’re doing what
we call ‘Deferred No or Low Money Down.’ We buy it, season it for six to nine (6-9)
months—sorry guys, that’s what the lenders need in America right now. I don’t make
those rules. I just learn how to work on that—but after six to nine (6-9) months, we go back
and then we draw out all our money from the property with new financing which is a refinance,
which is way easier than getting us a new loan. We then draw the money out and then
we can take the money and we can buy another property. Wait six to nine (6-9) months, buy
another property. And so we have people that are lining up. They’re doing several at
a time; we’re doing one at a time.
West: Wow.
John: And it’s just the way we can make great return. It’s just a matter, for us,
it’s doing what we do anyhow every single day. And we’ve already geared up. In a crash
we buy more, you know. In ’05, ’06 when we were in the big high boom in America, we
weren’t buying in the cities what we’re buying now because the prices were too high.
West: Definitely.
John: So I do what smart money does: In boom…
West: And that’s why people come to see you…as an investor.
John: Yeah. In booms we get out and take our profits.
West: Exactly.
John: And in crashes we come back in and buy with the vendors.
West: Sounds logical and very sensible. So, from people who are listening who can’t
necessarily access this because, I understand, it’s a very limited offer. You only have
a limited amount of…
John: Yes. So my barrier is not acquiring the great deals. They’re there, I can get
them. How do you deal with them? It’s really simple, mate. I mean, we get about 5% of our
offers presented. So we’re out there making hundreds of offers, hundreds and hundreds
of offers—I made over 20,000 in my life—and make hundreds of offers in a week over a period,
a couple of weeks. We get one out of twenty accepted. So we’re only…we’re really
cherry picking. We’re doing the very, very best deals. And we work hard for them because
that’s our system. We only want great deals. And the reason is, unlike a lot of people,
I don’t sell investments; unlike a lot of people, I don’t charge those fees. I own
a percentage. So I’m in a joint with all my investors. So therefore, if it doesn’t
work out, I’m the one who has to do all the freaking work and not make any money.
West: Yes. So it’s in your vested interest to make it work?
John: It has to work or we lose money.
West: Because you’re a golfer, John. You want some time to play golf.
John: I want to golf. I want to spend time with my wife and with my kids. I want to enjoy
life. And the last thing I want to do is chase bad deals. And the thing is I’ve got nobody
to blame but myself.
West: Absolutely.
John: It will be like, oh, you take lemons and put lemonade in. And you know what, I
figured out a long, long time ago it’s a lie because you just buy lemonade and put
that lemon squash—as you call it here—than to put it all together myself.
West: Great, great. Cool.
So John, I understand also you have a lot of educational material that people can learn
your strategies if they can’t necessarily go into business with you directly. Tell us
about some of your work. Obviously, you’ve got the bestseller and you’re ? ? ? a week
[10:38].
John: Yeah. We’ve got a lot of things out there right now. I mean, the prominent thing
that people are talking about is what we have: a course called the ‘Perfect Storm.’ And
it’s all about how to invest in a crash. It’s from a very unique position. There’s
only a couple of us in the United States—when I say couple, I mean people who educate, who
actually actively invested in the late 80’s, early 90′s during the last crash. Because
let’s face it, if you didn’t actually invest in the last crash heavily—you know,
I bought hundreds of properties during that crash—if you didn’t actually invest in
the crash, anything you’re talking about its got a lot a theory in it. And you know
what, I went to high school too and I went to Uni (university) and I know that theory
doesn’t work so good in the real world. I mean, you’ve experienced that yourself.
West: Absolutely.
John: And so I’m the only guy—I’m not sure why, but there’s few of us—but I’m
the only guy who actually did a course all around how we work in a crash. It’s called
the Perfect Storm. I’ve got a great friend named Brian—he’s won 39 Emmy’s of the
TV Emmy Awards—and he did all the production. He’s a close personal friend. So it’s
really, really high quality, really great graphics. There’s no ‘uhms,’ there’s
no ‘ahs,’ the lighting’s superb. And really important here, with the questions,
the back and forth with the students, it’s all recorded where you can hear it, not the
normal where it’s kind of everything just goes blank for a little while then you come
back…
West: Yeah, I know one of those.
John: Yeah, I mean, we’ve all seen those and done those. And they’re okay. They have
their plate. But this one we made it a really high quality or effect.
West: That’s right, right.
John: And it explains exactly how to do it in a crash, so exactly how to invest. And
so a lot of people, if you want to do it on your own, you want to have a go at it that
way, awesome. That’s great. You can absolutely do it. This just shows you step-by-step exactly
how we do it in a crash and why. And I think one of the really important things we do is…I
hate getting blue-skied, man. I don’t mind if there’s some bad things in the deal,
but I need to know about them. What I don’t want is bad surprises. I hate those. And I’ve
had enough of those in my life—and a lot of people tell me to do stuff and I do it.
And it’s like, well, they forgot about this and this and this and this… And so what
we do is we include all the good stuff but I also include what goes wrong, what the challenges
are, what the options because there are natural challenges and obstacles in any investment
strategy. And we show you what they are and show you the best ways to handle them in an
event.
West: Awesome.
John: It’s just the very comprehensive part.
West: Yeah, it sounds like a great product. And obviously, you know this all stems from
the book that you wrote that’s, you know, you were telling me before you’re donating
it all to charity.
John: Yeah, Money Secrets of the Rich. This one I get to shamelessly plug, folks, and
here is why I keep none of the money from it. It’s Money Secrets of the Rich. It’s
actually been a bestseller here in Australia for 10 years now. There’s a brand new edition
we just did this last year. It actually is interactive with the website, moneysecretsoftherich.com
in the United States; in Australia, moneysecretsoftherich.com.au. And it’s fully interactive, the book interacts.
Each chapter—there are thirty chapters—covers the subject on money and finances and investing.
At the end of the chapter, there are two to five action steps and the action steps to
give you the 800 numbers and the websites and what you need to do. And you go to the
interactive website and just guide you step-by-step all through.
West: Wow.
John: It was a huge enhancement to the book.
West: That is great. And of course the content of the book itself is god, I mean, you talk
about so many key concepts including the seven, you know, seven levels of investors.
John: Seven levels. In the United States, there are all these people now, they have
a weekly—we joke about it; we refer to it as—‘bookets,’ you know, they’re like
sixteen pages. This (Money Secrets of the Rich book) is a 400- page reference manual.
West: It is. It is.
John: I mean it’s been out 10 years. It is timeless wisdom. Three and a half years
on the top of the bestseller list. It’s a great, great book. And it goes through like
the seven levels of investors. It teaches the seven money habits of the rich. We teach
you seven specific habits that what rich people do. And like the first one, it’s just timeless
because in all the researching goes through all the books, all the stuff has been written,
every single rich person that ever lived in the history of the world. So all mankind for
eternity, recorded history, they all did the first one. And yet, about 75% the people who
live in Australia don’t even do that one. And it’s really, really simple. You can
do it for as little as $50 a month.
And so we teach you that and put you on that path. And you know what? We’re going to
shamelessly plug the book because I don’t keep any of the money. You have to get Money
Secrets of the Rich to find out what those steps are.
West: Absolutely. And on hand, I’m going to thank John for his time. He’s kindly
donated some of his time to have a chat with us and, you know, we’re very thankful to
have him here in Australia. So thanks, John, for your time.
John: Hey, it’s been a great pleasure, mate. Thanks so much. Enjoy�