Getting started in Real Estate Investing with Tony Alvarez #574

Norris Bruce

Bruce Norris is an active investor, hard money lender, and real estate educator with over 30 years experience. Bruce has been involved in over 2,000 real estate transactions as a buyer, seller, builder and money partner.

Norris Bruce
January 19, 2018
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This week Bruce Norris is joined by Tony Alvarez. Tony is known as the REOMentor and has been a friend of theirs for a long time.

Episode Highlights

How did Tony jump on the opportunity when Lancaster was facing some crazy numbers?
What happened in Rosamond back in 2006, and how did Tony respond to it?
How did people respond to Tony the first time he spoke at an event for Bruce Norris?
What was the basis for selecting those who would be speakers at the Millionaire Maker back in 2006?
What lessons and experiences did Tony use to help him grow his business?
What is one of the biggest things Tony tries to do to help others wanting to get started in business?
What was the main reason Tony came back to speaking after not doing it for a while?

Episode Notes

Back in 2005 and 2006, Lancaster hit some crazy numbers. At this time, Tony’s intention was to sell everything. When he did this, some of it was for commercial use. By and large, he hovered over the Lancaster market for the next few years and watched an immediate reaction of these prices descending like a rock. It was terrible. In Riverside, it averaged 3-4% a month. If you were going to flip a house and figured it would be six months, you were reducing the retail by 25-30% to get to your resale number.

Tony was actually ecstatic at this time because, having failed twice before in the real estate business and maturing during this time, he reached the point where he knew ahead of time, with Bruce’s guidance, what was going to happen. Now he could look at it and see that it made perfect sense. He looked at Bruce’s conclusion, then looked back and analyzed it based on what he had already experienced in his life. At that time, Tony had only built two houses in the Antelope Valley that he had built himself. He bought the lot for $13 grand, and it ended up being two lots. He had an 1800 square foot house, one story, 4 bedrooms, 2 bathrooms. The two were right across from each other, and he put them up for sale one at a time since he did not want them competing with each other. One was worth $415,000, and it sold immediately. This one cost him $165 grand to build, including the fences and everything.

This happened back in 2005. Once Tony closed the escrow, he listed the other home right away for the same price. He got nothing for it. It ended up selling for a little over $390,000, which Tony was blessed to do. The only reason he got the price at this time was because a lady came up whose father was paying for the house with cash. She was a single mom, the father wanted her to have something new and safe, and it was everything they wanted. If this had not happened, Tony probably would have mad the home a rental.

In Rosamond, Bruce said they went through the $200s and all the way up to $285. All the last units went pending, and people were fighting for them. In Rosamond, people were spending the night on the last night for it to be sold. In 2006 with the last whole downturn, Tony walked away from it knowing he could do it all again. You don’t even need liquidity to do it the first time, you just need access to money. It is easier if you have some, but you don’t necessarily need it. However, Tony said he would not change a thing. The hard money lender and his interest rates and points made Tony be a better investor.

Tony had a partner who would not ask him any questions about anything. Any questions are all up front, and once he knew everything he knew Tony was safe. Tony went in to see Barry Cooper one day because he wanted to change the deal. He did not want to pay the mortgage payments as the thing was happening since he was in and out of a deal in three months maximum. He told Barry he was making little payments to him, and the only reason was because he did not have the staff. He was by himself and a one man show. He was bad at bookkeeping and keeping checks, but when Barry saw him he would light up like a Christmas tree. Normally, he never broke a smile off for anybody.

When Tony first sat down with him and asked him to change some things, he first asked him to accumulate his payments. He wanted to pay everything at one time. Second, he needed him to increase the loan-to-value he was giving him. Tony needed him to cover 100% of his acquisition costs plus his fix-up. When Barry asked him why, he told him it was because he was moving so fast and had 9-10 deals coming his way on a weekly basis. This meant about a 50 house inventory. He could not be bothered with other things and needed a second person to handle it. Barry was telling him how he was going to have to charge him interest on the interest, and he was getting happy.

Barry went on to tell him he could do it because he had been a house guy at one time. He had over 100 properties he owned at one time and was doing 10-15 rehabs at a time. Some of the people he dealt with were his buddies. Barry said he could do it primarily for one reason: he jokingly wanted him to go sideways so he could take the properties. He didn’t really want to, but he was just so ecstatic that he knew he felt confident in his decision-making.

Bruce said the thing that was unusual about Tony was people’s reaction to him. He doesn’t smile at anybody, but he practically adopted Tony as a son. When he spoke at the Millionaire Maker back in 2005, there was a line of people who wanted to hug Tony. Bruce put Tony last because he did not want anyone going after him. Ironically, he had not spoken before in front of a real estate audience. There was just something about him that attracted a lot of people.

Frankly speaking, Tony said after that he was never as happy with his presentations as he was that day speaking with the Norris Group. Additionally, he was not as frightened before speaking at Bruce’s event. Bruce asked Tony a question that made him stand right up. In that moment, he reminded him that the only thing people really fear is not being genuine or open. This was one of the best days for him and something he did not expect. He was there more as a participant in the audience than he was on stage. Any time he watches himself again, he walks away with the same feeling.

What was interesting was how everyone who participated in that was hand selected because their methodology was different. You had a Jack Fullerton who door knocked the neighborhood and bought houses, then you had Charles Harris who talked on the phone for two hours. Then, he would go door knock in a suit. Everyone had a niche they perfected that matched them. This is what Bruce wanted for the Millionaire Maker event. He wanted Tony to align with at least somebody. Tony’s strength is building relationships that send him things.

Early on, the things Tony used to grow in his business were the things he learned coming into the country from Cuba and from his parents. What helped them to succeed as a family in this country was after finding himself in a position where he had no money, he realized nobody was going to want to deal with him. He figured out what he had to do himself. The only thing he really had of any value was that he had been an appraiser and had some experience in business in real estate and some success. However, even if you have success, if you crash and burn as much as he did it destroys you internally. Every time someone says to you that you are not that bright, in that moment you are confirming all of that and realize they are right.

It was a slow process back for Tony, but he said there are certain things that energize him. Speaking to an audience where he is not concerned about charging them money is one. Tony is a capitalist at heart; but when it comes to sharing something with someone he believes can change their life for the better, he is paying them back a debt.

Bruce said he buys into people like Jim Rohn because of things like this. When Bruce first heard him, his first note to his brother was that he did not need their money. He was there for a completely different reason, and he got it right away. The reason Tony stopped speaking was because he was unhappy with himself and did not understand it. He was up in Oregon, going through drive-thrus, and identifying a group of kids in Starbucks and only one of them who stood out as a hard worker. Tony was carrying a box of books in his cars, and he called them over gave them the books to read. He will also see people at places like Home Depot working their heart out, and he wants to share with them about taking a tenth of their effort and putting it into the real estate business, you will own a Home Depot. He would then want to share with them to remember this moment since they owe this to the next generation or someone else in their life.

Bruce also pays attention to people serving him, and sometimes you meet an all-star. He may not have thought about the book idea, but he carries $100 bills. If you give them a choice, they will probably go for this from Bruce over Tony’s book. Usually, it is involved in Bruce getting the manager. He will tell him he has an all-star on his hands and tell him what he is doing for that person and what he is giving them. However, you would need to know why.

Bruce was at a Starbucks, and a kid was there at 6:30 in the morning energized and ready to go. He looked at Bruce and knew he wasn’t there for himself. The next morning, the guy goes through the whole shift. At 6:02 in the morning the next day, Bruce was walking up and was 15 feet away when the same kid spotted him right away. Bruce knew he was going someplace. Bruce got hired from a hardware store because of this exact type of event. The manager saw how hard Bruce worked, and asked him if he would like to come work for him.

Tony said on his drive to do the radio show, he had his phone in his truck. One of his notifications on Facebook was something he had reposted about an actress. He loves history and learning about people’s lives, their successes and failures. He likes learning about things that are real, not made up. He made a post about Audrey Hepburn, and at the end it said she went on to work with orphans in the world. One of her quotes is that we have two hands: one to help ourselves, and one to help someone else. Things like that bring Tony back to his purpose for being there, which is to do the best he can with him, know it’s real, confirm it for himself, and share it with who he can.

Tony has been asked why he came back to speaking. He said it is not for money, and he has already made this point since he makes plenty. However, one thing he has learned is that you cannot hide from what you are given to do. Tony has been given to share the truth about what he learned in his life: how he makes money, how he stopped losing it, the people he met along the way who gave him a hand to change things in his life. It is his responsibility to open his mouth and share what he knows. He is in the sharing mood and fired up about it.

Bruce said what was interesting about the last quarter was in dealing with a lot of the people they deal with, the financial part of it has been taken care of many times over. If you thought the goal was $1,100,000, then at the beginning stages you would think you were poor and need to hustle. The majority of the world is still working on that plan, hoping to someday get there. Bruce asked Tony what he does with his time when he has amassed all these things way more times than he thought he would ever need. What do you do tomorrow? The answer is that everybody’s answer is different. Bruce said if he asked this to Tony Alvarez, Rick Solis, or Mike Cantu, the answer is very different to them. Rick sold everything, so he is off on his own.

In the story of Gulliver, he visited the country of the little people. There was always one saying it would never work. This person reminded Tony of Rick since he would be the same way. However, this was why he would partner up with certain people who did the things he did not want to do. Tony said he actually had not seen anybody arrive at a value as fast as Rick. You call him on the phone, give him the address, and he was there in a second. When they would speak in front of crowds, they would share things they didn’t like.

Tony loved connecting with people from the very first time he spoke on the stage for the Norris Group. He didn’t really understand why it worked as well as it did until afterwards. It had to do with the fact that he told them nothing but the truth and shared the things he found in his life that caused real positive change for him. He shared this, and it resonated with everyone. They wanted to get their arms around whoever brought them the information, hence why they hugged Tony at the end. So far three Millionaire Makers were done. Bruce said this event is not so much about real estate but rather who you bring into the business and working on yourself.

Tony had migrated from Cuba, and he always hears stories of people dying trying to reach Cuba. However, there was a speaker named Diana who told her story about how she would not give up. All Tony had to do was buy houses. He felt bad for her and wanted to send her money.

Bruce asked Tony who his favorite mentor is, whom he said is Guy Finley. He is in the foundation in Oregon, near where Tony lives. He taught Tony to pay attention to his own mind and thoughts and really be a shepherd of his behavior internally. Part of why we fail all the time is we are constantly listening to nonsense. We are directed by fear. He taught Tony to recognize the difference between physical fear and psychological fear and become more aware of what is going on in his head before taking action. We chase all these things, and then we crash and burn. We are the ones directing all those decisions, then punish ourselves for it. He is way at the top of the list. He was best friends with Desi Arnaz Jr and came from Hollywood, and he left all that. .