Guest: Frank McKinney, Real Estate Maverick
Travis Miller: And welcome to the special edition of Straight Talk, with Jimmy Vee and Travis Miller. Of course, I’m Travis Miller ––
Jimmy Vee: And I’m Jimmy Vee!
Travis Miller: Today for your listening pleasure and your ultimate enrichment, we have a guest that’s going to blow you away. I’m mean this guy can literally change your life probably in five minutes, let alone the amount of time we have carved out today to speak with him and share with you. This is the gentleman who’s known as the maverick daredevil real estate artist. Guys, this is a super hero meets Robin Hood kind of story here. A guy you’re going to want to listen to. Five-time international best selling author, philanthropist, risk taker, visionary. The kind of guy we’d all like to be I think, and can only one day hope to become. As our good friend Michael York likes to say, life is a journey of becoming. Right? And Frank has certainly done a lot of becoming, and hopefully we can follow in some of those footsteps, and we’ve got him here today for us all to learn from.
Frank, thanks so much for being with us.
Frank McKinney: Hey guys. I’m really looking forward to this. We’ve become via a mutual friend who we both respect, and I had this on my calendar for a couple of days. Really looking forward to spending some time with you and your huge following that you have.
Travis Miller: We’re looking forward to it, too, so what do you say let’s get started?
Frank McKinney: I’m ready. Let’s hit it.
Travis Miller: So you know, my first question for you, Frank, is for the person listening saying oh, real estate. I’m not in real estate. I really don’t need to even listen to this. So you know, next program. What would you say to them?
Frank McKinney: Well, first of all I’m not a real estate developer. I’m not a builder. I’m not a contractor. I’m not a rehabber or I’m not a flipper. I’m a real estate opportunist. I’m an artist when it comes to creating these beautiful homes on speculation on the ocean. We just finished the world’s largest and most expensive certified green home at $29 million and over 15,000 square feet.
I’m an entrepreneur. I’m a capitalist. I’m a pursuer of free enterprise who happens to hone his craft on real estate. So I could be doing anything, but this just happens to be for the last twenty-five years I’ve made markets where they hadn’t been before in the real estate business. But what we’re going to talk about today will transcend whatever business that you’re in.
And I think the takeaway I hope that you’ll go home with is you know, we are in some challenging times right now and what are we going to do when entrepreneurship is under siege by primarily the media and a long with that, apathy and fear like I’ve never seen it out there before. And I just hope that you know, you’ll see as somebody who is pursuing free enterprise, and that’s what an entrepreneur is – he’s a relentless pursuer of free enterprise and capitalism – that now, today is the – these are the low-hanging fruit days. These are the millionaire maker days. Regardless of the kind of work that you’re in.
I think you might find it fascinating when we talk about where I started. Everybody starts somewhere. Nobody’s born a real estate investor, or born an entrepreneur. You’re made. And so I started almost twenty-five years ago buying and fixing up these single-family homes. I didn’t do a house worth more than $100,000 for the first six years of my life.
And there’s a great author out there by the name of Malcolm Gladwell
Travis Miller: Sure. Yeah. Absolutely. Tipping Point. Blink. Outlier. He’s great.
Frank McKinney: His new book Outliers talks about to become an expert at anything in life, guys, you have to apply yourself for 10,000 hours. That’s about five years fulltime. And I realized when I read that book that you know, for the first five years of my career I didn’t do a house worth more than $100,000. I was just a get in there, find opportunity where nobody else wanted to go, typically in these first-time homebuyer neighborhoods. All the other investors were too lazy or too scared to go in these neighborhoods, and I saw an opportunity to do one thing very simply, and that was instead of having people rent the American dream, I would teach people how to own the American dream. And I’d take first-time homebuyers out of that rental situation, and put them into a house that we had renovated and they’d get to own that American dream.
And now let’s fast forward to today where we’ve done now thirty-six projects since 1991 on the ocean with an average asking price of $15 million with the highest being one sold at $50 million, and the one I just referenced Acqua Liana, the world’s largest and most opulent certified green home at $29 million.
So there’s a journey associated with that. You know, I think that that passage, that one passage from Outliers an entrepreneur, the get-rich-quick days, I’m kind of – there is a silver lining that is associated with the troubles that we’re going through now. And I think that a lot of that Google mentality, that – you know, let’s just type it in and let’s get on with it, and let’s you know, in sixty days we’ve made a fortune. That’s not typically how legacy generational networks are created. It’s a network created over time. It’s created, you know, one – I talk about it in my new book Burst This, and also I touch on it in The Tap. The lunch pail approach.
I’m just showing up day in and day out, had a lunch pail, with a concept of choosing to carve your niche a little deeper and a little wider than most. Hey, I don’t deviate outside of what I know. But what I know, I know really well. My only deviation outside of what I know is these books that I’ve written, and I think today is – for those of you who are getting started in business, and let’s face it. A lot of people get started in business because they have no other choice. They’ve lost their job. Look at it as a blessing. Look at is as that absolute silver lining for you to go out and start your own business.
Travis Miller: Now of course, Frank, I mean with all that you’ve done, I think a lot of people would come to the – jump to the conclusion that you must have started with a silver spoon in your mouth, and you know. Plenty of opportunity and a private education and probably a pretty significant financial boost. Now I know that’s not true, but maybe you could tell people how you really started.
Frank McKinney: Well, you know, for those of you who are younger or just starting out and are young in entrepreneurial experience, I went to four high schools in four years, and it wasn’t by choice, guys. I was in one high school after the next, after the next, until I finally graduated from a high school that was run by Benedictine monks. And it was a boarding school and my parents had shipped me from school to school, and I had a difficult time with – you know, with the structure of formal education, and unfortunately for me, I really think so – I came out of high school with this 1.8 grade point average, so it didn’t allow me the opportunity to pursue a formal education.
So I came down to Florida when I was eighteen years old with a one-way plane ticket, and a $50 bill. There’s nothing extraordinary about that part of the story. How many eighteen-year-olds have more than $50? But I tell you what, when I got off that plane, I will tell you now – and this is a mindset that has never changed with me – I may believe in the welfare system for what it was intended to do back after the first Great Depression, but I don’t believe in the welfare mentality. I don’t believe in the entitlement mentality. I believe in going out there and earning every dollar that I can and working hard for it.
I’m not – I’ll be honest with you, I’m not a work smarter, not harder kind of guy. I ‘m a work harder and work smarter kind of guy. And it’s gotten me to where I am today. So yeah, I started digging sand traps on a golf course earning $180 a week without that education. I went from digging sand traps on a golf course to maintaining the tennis courts. Down here there’s a lot of people who have leisure time. I’m in south Florida.
And so you know, I was out there watching – I was watching the Robin Leech’s program Life Styles of the Rich and Famous. I got to watch it. I mean, not on T.V. Live on the tennis courts, on the golf course, all these people had all this discretionary money, and they had tons of time to play tennis all day. And I decided – and that was actually a time when Robin Leech had that program Life Styles of the Rich and Famous, and I wanted to live that life. And I went out I made it happen by starting my own – my first business when I was nineteen, which was a business where I went out and instructed tennis at some of these very affluent communities.
But guys, here was the thing. I was around affluence and I used my introduction to affluence when I was a tennis instructor to earn my PhD in entrepreneurship, my masters in free enterprise, on that tennis court teaching people how to play tennis. And you know, here I am across the net from a very successful person. After forty-five minutes these people would be too tired to finish their tennis lesson and I’d sit down, and for those fifteen minutes every hour on the hour for two years I’d pick their brains. And I got to emulate, I got to learn and then morph into and emulate the successful characteristics that I saw in these people that were living the life styles of the rich and famous.
Travis Miller: That’s so instructive right there. Just the fact that you saw the opportunity even back then to take – to steal every second you could to ask these people questions, and mine them for golden nuggets. And based on that, what were some of the kind of one or two tips that you got when you were doing that? When you were mining these rich and famous.
Frank McKinney: The first thing that I think I would instruct people to do is look for opportunities to pick the brains of those people who you would want to consider your mentors. I have mentors who don’t even know they’re my mentors. You know, you think about mentors are these people that you meet with once a week or every – you know, once every two weeks, and they have to – no, that is not. Some of my greatest mentors are books written by people I look up to.
And what I have found out that successful people will – they don’t mind sharing their secrets, but very few people will ask. And you know what? If they don’t want to share it, so what. Move on to the next person. No big deal.
And so I came up with this conspiracy. I will tell you as the tennis instructor of these very affluent communities, I purposely tired out my tennis student after forty-five minutes. I made it my objective that they couldn’t finish their tennis lesson. They got too tired. I’m in great shape. You know, I can run around all day out there and they – I made them sit down after that forty-five minutes, brought them a cold drink, or you know, a towel. And then I would sit there and ask them a question. And what I – here’s what I learned, and this is why I’m in the real estate business, is nobody is born a real estate investor. We are all – everybody listening to this call was born a nine to fiver. You may get into the real estate or you may get into the entrepreneurship business very early, but you are not born that way. We all have inherently what I call a cubical mentality.
That’s okay. Don’t take that as an insult. We were born to sit in the – now my cubicle happened to have been a tennis court. I mean, you know, didn’t fit in a real cubicle, but that was my nine to five. That was my job. There was a limit to the amount of money. Even though I was making $50 an hour, I was making $300 to $400 a day, I had a six-figure a year income by the time I was twenty-one, there was still a limit to how much I could make based upon how many hours I chose to bake in the hot sun. Right?
Travis Miller: That’s right.
Jimmy Vee: Sure.
Frank McKinney: I then realized that boy, these people, they all started out also as nine to fivers. Lawyers. Inventors. Doctors. But they took their discretionary income and they invested it in – most often I found them investing in real estate. And so I’m like hey, this is – you know, I have some discretionary income. I’ve made some money teaching tennis. I saved all my money. You know, if you go to my website I’m a lot less exciting than I look. I will tell you, I go to bed at 8:30, I get up at 4:30. I don’t drink. I don’t smoke. I don’t do drugs. I don’t gamble. I don’t womanize. I don’t overeat. I don’t oversleep. I’m pretty – my wife calls me a nerd in sheep’s clothing.
And I live that way. You know, I kind of swore off all unhealthy vices and temptations back when I was nineteen or twenty. I saved my money, guys, and I listened to these people who taught me to take – you know, that that discretionary income, whatever you’ve got left over, and invest it in you. Invest it in something that’s going to go – it’s going to grow exponentially greater than Frank, the time you’re going to spend out here on the tennis court or Travis, the time you’re going to spend in you cubicle, whatever that may be. Or Jimmy, your cubicle whatever it may be.
And Frank, you know what? Take the risk. You’re living in a nice comfortable area here in the sun. You’re teaching these beautiful women how to play tennis, and it’s a good life but you know what? What you’re making today you’re never going to make more than what you’re making – because you know, I’m young. I could teach for eight to ten hours a day. My God. It was only going to go downhill from there. Take the risk, Frank, to move outside your comfort zone.
And in my new book The Tap I quote one of my favorite authors, and I’m not sure if you guys will be familiar with him, but there’s a philosopher by the name of Anthony de Mello. You ever heard of Anthony de Mello?
Travis Miller: I have.
Frank McKinney: He – you have?
Travis Miller: Um-hmm.
Frank McKinney: Oh, good. He – not a lot of people have. He’s been gone for about twenty years now, but de Mello said this about fear, and I want you to focus in on this. We’ve been taught our entire lives that we fear the unknown. When I was a little boy my nickname was Mickey. And Mickey, you know, you’re going to – you have this great fear of the unknown. Don’t go there! It’s unknown! And my parents would build up this fear of the unknown. And they would make me believe, just like I’m sure your parents made you believe that the unknown is something to be afraid of.
De Mello says how is it possible that we can fear something we don’t know? Think about that. You cannot fear something you don’t know. So let’s say this was a live – you and I were recording this live on television, and we’re sitting in chairs that are three feet apart. Now I’m feeling really comfortable sitting across from Travis and Jimmy. And then all of a sudden Jimmy just reaches out and punches me in the nose. He just – like a turret reaction. He just can’t hold – he knocks me in the nose.
Jimmy Vee: I’ve been known to do that. [Laughing]
Frank McKinney: How could I have been afraid of that act? I didn’t know that was going to happen. I was very comfortable.
Jimmy Vee: Right.
Frank McKinney: De Mello says we’re not afraid of the unknown. It’s impossible to be afraid of the unknown. What we’re afraid of guys – and listeners – we’re afraid of leaving the known. We are afraid of leaving the cubicle. We are afraid of leaving the nine to five. Frank is afraid to leave the tennis courts.
And isn’t that true? We get sucked into this comfort zone, and especially now when the 603 television stations that you all watch, and I watch, are spewing the negativity, they’re prophetizing the doom and the gloom, and they’re brainwashing us into believing that the world is coming to an end. Which makes it even harder for us to want to leave the cubicle mentality and leave the known.
So you can’t be afraid of something you don’t know. What you are afraid of is leaving what you do know.
Travis Miller: You know, Frank you tell us the story of learning from these successful people whom you were training on tennis, right? And you know, I’ve heard stories like this in the past from very successful people. About how they’ve, you know, rented broom closets in high end office complexes just so they could hang out in the club upstairs and rub shoulders – rub elbows with the people who knew so much. Or other similar stories to, you know, ways to become you know, known and familiar and ingratiated with successful people to thereby learn some of their secrets from their information, and indeed success leaves clues. Right?
So what would you say to someone who right now – because I know people are so skeptical and people really need a shove off the couch or out of their complacency into the unknown exactly as you’re saying here. What do you say to someone who says well I don’t teach tennis at a country club so how could I possibly get around these successful people?
Frank McKinney: Okay. Very simple. It’s very simple. Everybody has what I call a risk tolerance which is your tolerance for taking on risks. And in the new book I have you go in and draw a simple continuum. A simple line. Just a horizontal line. And put a hash mark on that line – well I should say, on the left-hand side you’re going to write the word phobic, and on the right-hand side of the line – on the very far end of the line you’re going to write the word daredevil. Where do you fall with regard to your risk tolerance?
And most people, if you’re honest with yourself, you know, that hash mark is going to come a lot closer to the phobic than it is to the dare devil. What I’ve learned is that you need to exercise your risk tolerance. You need to exercise your risk threshold like a muscle. Eventually guys, it becomes stronger and is able to withstand greater pressure.
You know what? If you think about what I do for a living now, in these times to build a $29 million house on 1.6 acres, fully furnished down to the gold-plated toothbrushes in the bathroom, linens on the beds, towels in the closets, turnkey without a buyer in mind. Okay? I don’t have a buyer lined up for this house. That would be considered suicidal. Yet, for twenty-five years that’s all I know. But it didn’t start there, guys. It started with a $50,000 house. It actually started with me coming off the tennis court and saying yes more than no. Building a little self confidence. Being willing to, you know, exercise that risk threshold like a muscle, building a little bit of muscle tissue.
And so you’ve got to put yourself in these positions where you know, I don’t know where – I don’t know if this a national program or if it’s a regional program, but you’re going to business clubs. You’re going to business organizations. For us, I was going to real estate investment clubs and learning everything I could from those who could walk the talk. I’m going to be careful to quantify that.
There’s a lot of snake oil salesmen out there that haven’t done a deal, whatever – you know, real estate deal or any other transaction for quite some time, and all they’re good at selling is their products. I gravitate to people who walk the talk. I am motivated by people who can back up what they say. And so you need to – especially in today’s times, folks, you need to create your own reality.
Like you said, I think it was Travis that said get off the couch. You know, the couch – if you’re on the couch you’re probably not reading. You’re probably watching television. You need – that is a horrible reality. As a matter of fact, regardless of your religious preference, you’ve heard of this time called lent? You know, it’s a forty-day period for Easter. And I’m Catholic so at lent we give up things.
Because we got so fed up with the T.V., and I have a ten-year-old daughter, we turned the cable off at the cable box. I mean, we went and cut off – and now boy, I’m watching my daughter, we’re working and we’re talking at night and talking about her future. Those are the kinds of things you need to do. Create your own reality. Don’t rely on somebody else’s. Look to associate yourself with successful people, and get out and make it happen.
Jimmy Vee: Awesome. You know, it’s funny. My cable was turned off yesterday because we were switching cable companies and ––
Travis Miller: I told you to pay that bill, Jimmy. [Laughing]
Jimmy Vee: Yeah. Switching cable companies, there was a mix-up. The cable company didn’t come out to the house yesterday, so I got home there was no cable. And I came in today to the office and I said Travis, you know what? I did more reading last night with the cable turned off than I have in quite a while. And I’m a pretty voracious reader, and don’t watch a lot of T.V. either, so – but just the fact it wasn’t there I got so much more in. So that really is an opportunity there. So you need to leave the nest and you need to exercise your risk tolerance, and your brain with reading.
Travis Miller: Well, you know, it’s interesting. We talk about fear and you know, the concept of turning the cable off at the cable box is fairly Gestapo. You know what I mean? Like a draft act. But when I think back to when we started this business, it was 2004. Frank, it was six weeks before my wedding and I don’t want to take up the spotlight here with my story. We’re here to take care of yours. But it’s an interesting point that I wanted to relate here.
It was six months before Jim’s wedding. Six weeks before mine. We left great jobs and went into the unknown, and had nothing. Okay? And so if you’re in a similar position, whether you’re just starting out or maybe you’ve been business for a long time but now in the headwinds that you’re facing right now because of the current you know, situation, you know, you’re finding things more difficult ––
Jimmy Vee: You have to make radical change.
Travis Miller: Yeah. And you’re saying I don’t know what to do. I don’t know what to do. You know, I need to get some progress. That maybe you need something like shutting off the cable box. You know, it would save a couple of bucks on the one hand, but on the other hand, you’d get more done. I think a lot of people are resistant to make bold dramatic changes like these in their lives. What do you think, Frank?
Frank McKinney: Part of – you don’t have t – it’s hard. You’re right, guys. It’s hard to make bold dramatic changes. One of the things you can start – and I’m an advocate for baby steps. I really am. I mean, if I had a dollar for every time somebody said you know, Frank, how do I buy and sell fifty houses in a year, and my answer is the same – start with the one. Just do the one and do it really well, because if you lose money on your first real estate transaction, you might leave a very lucrative business, because you’re terrified now. You think you stink at the business. You didn’t take the time to pay hyper attention to the first deal.
I made $7,000 on my first house. Had I not make that money – and $7,000 I tell you what, back you know, that’s a lot of hours on the tennis court that I made. I manufactured that money. You know? And if it wasn’t for that success, I probably wouldn’t be – I would have been terrified. I would have been scared back onto the tennis court.
So you know, these baby steps where in today’s society – this is going to sound a little bit eccentric, but my office is in a tree house. I’m talking to you today from a tree house that overlooks the Atlantic Ocean. It has twelve windows in it. It’s perched high up in the strangler fig tree which is a native tree of south Florida.
Now that sounds – and I wrote all five of my books from this location. I’ve designed – for the last seven years I’ve designed – eight years I’ve designed all the houses we’ve built from this location. It cause for me to create an environment that is very conducive to drawing out my creativity, and when you act on your creativity what are you doing? You’re exercising your risk threshold. You’re taking that chance.
So the baby step that I want you to think about doing is find a place either in your house or outside of your house where you can change – you can become somebody else. You can jettison off that old way of thinking and even if it’s, you know, like you say, a broom closet or a small corner of your house – that is your domain. And I tell you what, ever since I’ve built this tree house in 2002 – and I never had one as a little boy and I always wanted one. I didn’t see it really turning into my office, but it got – it’s got a shower in it. It’s got a toilet. It’s got a sink. It’s got a king size bed. It’s tiny. It’s 220 square feet. It’s got a loft in it. My daughter comes in after school and does her homework there. Flat screen T.V. It’s got – you know, my desk. DSL. It’s got everything I need to become something I wasn’t.
And I think that’s a really dynamic thought is you need to create that environment. Be it with these other folks. You know, successful people. But on your own. On your own where you’re going to formulate a plan for the rest of your life.
Now be careful that you don’t get caught up in what I refer to in my real estate book as spread sheeting your life away. Researching your life away. That’s one of the downfalls of information on demand. Is when you’re thinking about a new business let’s say that Travis or Jimmy are encouraging you to get into, and you then start to do some research. The danger with all the information that’s out there is you Google it, and that’s cool. Hey, I do – I’ve traveled the world studying architecture so I could build these magnificent homes.
The danger today with some young people that I see is they study it to death. They study whatever the venture is to death and what I’ve learned psychologically watching this happen, I advocate that whatever you’re getting into, whatever line of work you’re going to get into – let’s be general and say entrepreneurship – you study it for no longer than six months. You do not need to study anything longer than six months before you pull the trigger.
If you’re studying it longer than six months, you are subconsciously while you’re going out there and grabbing all this new data, you’re looking for a way to say no. You are looking for a way – and believe me, with the information that’s out there, you’ll find it.
Travis Miller: That’s right.
Frank McKinney: You will find a way to prove yourself right and say oh, nope, now’s not the time. I’m not going to do it. If I looked for a way to say no to, you know, building a south Pacific home on the ocean that it’s $29 million on spec in today’s market, I wouldn’t have to look too far for reasons to say no.
Jimmy Vee: No, no. You wouldn’t.
Travis Miller: Lou Dobbs. Just turn him on. You’ll be fine.
Frank McKinney: Exactly. But don’t be sucked into that. So I have a six-month rule. I have a six-month rule with any employees. I basically say you’re going to be no good to me for six months. I’m going to be very patient, but after that you’d better perform. So you use that in your life. If you’re out there, make sure you spend the six months, though. A lot of people will spend, you know, two months or so and if they haven’t made $100,00 they’re going to move on to something other venture.
Travis Miller: That’s right.
Frank McKinney: That’s a travesty. You’ll wake up one day, you’ll be fifty years old, you’ll look in the mirror and say what the hell did I do with my life.
Jimmy Vee: Well you know, because of the glut of information out there, you could – a little bit of research quickly turns into a rabbit hole of a lot of research and of a lot of time wasting. The information is important ,but the action – it’s the action that’s essential.
Travis Miller: Yep.
Jimmy Vee: You could go on – I mean, because I believe that research and information gathering basically becomes procrastination at some point. It becomes a reason for procrastination. So it’s the action that’s essential if you’re ever going to see any kind of results from anything. And I think that’s one of the biggest stumbling blocks most people have is the action. Taking the ––
Frank McKinney: And people get sucked into the psychological exercise of brainstorming. And that’s wonderful, but it’s overrated. If you have a functioning brain, you’re going to come up with some great concepts and some great ideas within the first week of pursuing something new.
People use this – I’m not impressed by idea guys. I’m not. I mean, people come to me with all these new ideas for new things. You know what? Go out and do it. Go out and – you’ll impress me when you implement it. You’re not going to impress me by coming up with thoughts.
Travis Miller: No doubt. Well, you know, probably – most people listening to this probably have stored away, you know, sheets of paper with you know, ideas written on them. You know, and sometimes you get an idea that you came up with, you know. You see someone else roll it out and you think you know, this person stole my idea or whatever. But you know, the idea is essentially valueless until you have plan and then action to back it up.
You know, and so few people – I think so few people realize that, and they spend their whole life. It’s a great term, Frank.
You know, I hope to quote you on it many times. Spread sheeting their lives away. You know, coming up with ideas and then talking yourself out of them.
Frank McKinney: That’s right. And don’t think that you have to come up with the next computer code for the next Google. You know. I’m a, you know, sticks and bricks guy. I’m a very simple linear thinker, simpleton. You know, I – you don’t have to come up with some brand new technology. You can improve on something that’s already out there. You can – you can become a franchisee.
You know, my brother owns the largest Weichert franchise, Weichert is a real estate company, in the state of Indiana. And he’s killing it. I mean, he’s killing it. He’s making hundreds of thousands of dollars a year, and he’s a franchisee. But he pulled the trigger. He studied it for six months. He followed it to the tee. Studied it. Was he going to start his own company under his own name or was he going to franchise? And you know, I was probably much help. I wanted him to go with his own name. He said no. I respected that and now he’s proven right.
But the key is, like you guys just said, he followed through. He executed and now he’s killing it.
Travis Miller: Frank, what type of advice do you have for somebody in, you know, today’s climate? You know, we said just as we were chatting before we started recording here, we talked about the concept of headwinds. The headwind that we’re facing right now. And I think you used the term – the phone broke up for just a second, but I think you used the word stateism. Maybe you didn’t, but that’s what I heard and if so, that’s an interesting topic in and of itself.
You know, but what we’re facing right now where there’s an outright assault against capitalism and free market enterprise, and we’re watching right now Iran’s prophecy happening in the looters and moochers and destroyers literally taking over the world in front of our every eyes right now.
What do you say to a person who’s trying to make it as their own man or woman right now, and facing this headwind? How can they get ahead right now?
Frank McKinney: Well first of all, you have to step back. Let’s be what they call futurist. Let’s look forty years down the road for a second and let’s imagine that my daughter, who would be you know, forty years from now she’ll be older than me, but let’s say thirty-five years from now she’ll be my age. She’s ten, I’m forty-five. And her kid is studying social studies, and opens up the book, the social studies book, and reads about the bastardization of the First Amendment back at the turn of the new century.
Let me tell you what I mean by that. Since 9/11 we have slowly saw our innocence and our belief in free enterprise and capitalism erode under the weight of the media. And now it’s reached a fevered pitch where there will come a point in time when – and I’m going to give you an example how I think it’s starting to turn – but there’s going to come a point in time when America wakes up and realizes the emperor isn’t wearing any clothes – that being Lou Dobbs. Right? [Laughing]
Jimmy Vee: That would be scary. [Laughing]
Frank McKinney: You’re right with that. Enough is enough. The media has broken the sprit – I should say broken the back of the American spirit. I mean, there are those of us who are bearing the weight of the American spirit, but there are many people out there who don’t know it, but subconsciously have had that American spirit broken by the media. It will be looked at by sociologists who study society thirty-five, forty years from now and say what the hell happened to the First Amendment? When did it turn so negative?
Guys, the pendulum has swung too far in the direction of gloom, doom, world coming to an end. Nothing sells unless it’s negative. And you have to first realize the source. You must not receive your financial literacy from the television. And it’s unfortunate that many people in this country use the television as their – for their financial education. For the way that they believe they should live their life. So that they see the Entertainment Tonight , and they see the Britney Spears you know, and the Lindsay Lohan’s and they think, you know, that’s the way, you know – as a kid – I want to grow up to be like that. And then when they get to be an adult, they’re taught that free enterprise is evil. Profit is evil. We’re going to tax profits now.
You know, that’s how – what this country was founded on, and it’s going to take people like Jimmy and myself and Travis to get out there and spread the news that you know what? Free enterprise and capitalism is not dead. And for those who think it is, you’re like one of those – what Sting said in his one song, I forget the name of the song. Lemmings in shining metal boxes. Right?
You’re just kind of marching. And you know what? For people like Travis and Jimmy and me, great. That means that much less competition. You’ve got to realize that this is salt on the American spirit. It’s going to be short lived.
There’s a wonderful successful T.V. producer by the name of Mark Burnett. We know Mark Burnett. Right? Survivor series and the Apprentice series.
Travis Miller: Sure.
Frank McKinney: Well, he is without divulging too much, he’s starting a mega show that is going to be focusing on good news. You know, something – how’d you get so rich. Now for him to believe – for him, who’s in the media, to say you know what? I’m going in the opposite direction and I’m going to have a show that focuses on the positive, he’s a visionary. When I heard that this was coming out, that told me something. That we’re getting ready here to turn the corner.
So folks, when you’re watching the television and you realize it’s all bad and you know, the financial markets are in ruins, the credit markets are in a state of chaos, that – we all know Warren Buffett too. Warren Buffett says when everybody’s afraid, it’s time to get greedy, and when everybody’s greedy, it’s time to be afraid.
Jimmy Vee: Sure.
Frank McKinney: So isn’t this – I mean you, not that I’m a big stocks guy, but you could have bought Citibank for 97¢ the other day a share. You know, it’s back up to – you could have tripled your money. Bank of America. You could have offered $2.50. It’s now $8. And that was all about capitulation and pessimism overtaking rationalism.
Travis Miller: Sure.
Jimmy Vee: Sure. Well there was, you know, there – everyone was fearful.
Travis Miller: Well the exact same thing is happening with the real estate market. Not at such dramatic speeds. You know, you can’t buy a house today and you know, three weeks from now triple your money on it in most cases. Obviously there’s some examples. But you know, it’s interesting. I’ve been seeing some Re/Max commercials that are hitting on this point that’s interesting. They’re coming on and saying hey, you know, like now’s the time, folks. This is the time to get a great deal on a home. You know?
And it’s interesting because when the housing market was at its peak, everyone was running around buying houses. And it was sort of, you know, silly to watch everybody you know, falling over themselves, you know, haggling over these houses. I mean, what are you trying to get a piece of at the peak? There’s nothing left.
Frank McKinney: Right.
Travis Miller: But it’s all left for the taking right now to get hold of. You know, and this may be true in your market share and the customers that you can get from your competitors.
Frank McKinney: Yeah, and in my new real estate book Burst This, Frank McKinney’s Bubble Proof Real Estate Strategies, what I did is I went back and studied six different real estate cycles dating back to the mid ‘70s very much in the way – I don’t know if you read the book by Jim Collins Good to Great.
Jimmy Vee: Sure.
Travis Miller: Yeah.
Frank McKinney: Very much in the way he went out and studied those companies I wanted to do some antidotal research and studied six different cycles. Actually not just real estate cycles, but economic cycles. And I wanted to show the reader what to look for when a correction’s on its way, when we might be topping out, when the correction’s taken place, when it’s time to buy. That’s how you bubble proof your real estate investment. And you’re absolutely right, Travis. That today the ReMax commercial, it’s – let me put it in, let me use a stock analogy again.
If you – remember when Microsoft was having its antitrust issues and it got hammered?
Travis Miller: Yes.
Frank McKinney: Or a recent example would be Dell’s computers were lighting on fire. You know, and their stock was hammered. You know, a blue chip stock with historical earnings, a return on investment, and it got hammered. And you knew you could buy Microsoft at whatever, $10 when it cratered. If you knew the bottom was there and a financial advisor said hey, this is just a one off the European union’s hammering these guys with antitrust issues, or the consumers are hammering Dell because their computers are catching on fire. They’re going to fix that. Here’s the time to get in. The same thing – you would buy. You would buy. If you had exercised your risk threshold you would buy. Same thing holds true for real estate.
Today, you know, whatever the – the 24th of March at the bottom? Who knows? But I tell you what. We’re awful close to seeing a bottom and I saw the bottom and I saw how they come and go over these last six cycles that I referenced in the book I wrote. This is the – I mean, the absolute low-hanging fruit days, guys. And I’m not just talking about real estate investors. You’re looking to buy your own home.
This is a wonderful time to go out and do it, because as quickly as – you know, because I’ve written five books, I do a lot of talking and we go to the real estate investment clubs and such, I will remember as clear as it was yesterday about 2 ½ years ago I was at a big real estate investment convention down in Miami, and we were keynoting a group of 2,000 people, and the common theme was around the audience I can’t find any deals. Frank, the margins are too thin. It’s an absolute seller’s market. What are we going to do?
And I said you know what? Be patient. Well look, there’s 7,000 unsold condos in Miami right now. You can buy them at about 35¢ on the dollar. There are vultures out there that are going out and doing that, and they’re going to rent them for a couple of years until the market turns around, and then they’re going to be millionaires.
So you know, you’ve got to look for opportunities like now. The smart money is always ahead of the dumb money. Follow the smart money and you watch people start to pile in to some of these assets that have been devalued so significantly and jump in before it’s too late.
Travis Miller: That’s right.
Jimmy Vee: Yeah Frank, I want to go back to the Mark Burnett thing that you were talking about, because I think it’s such an amazing and educational point, which is you know, when everything is going one way – it is a pendulum. Momentum of the pendulum says it has to come back the other way, and Mark is taking the opportunity here to be the maverick who starts the swing in the opposite direction. And I think, you know, Earl Nightingale said it, you know, really great. If you don’t know how to get to the front of the line, or how to be the best in the marketplace, just take a look at what everyone else is doing and do the exact opposite. And that’s what Mark’s doing there in the market. And if he’s being – the fact that he’s produced some hit shows, can get the idea that positivity is going to be something that sells, because obviously he’s not going to something that doesn’t produce revenue – then that’s a great opportunity and it lends some shining light on what we can look forward to in the future.
Frank McKinney: Yep. There’s a chapter in my real estate book. You know, I wrote three books at the same time so I want to make sure I got the right book here. Yes, it is the real estate book, and there’s a chapter in there entitled Why A PhD in Paridoxicology Is Required. Why A PhD in Paridoxicology Is Required. It’s under the section of the book titled the Competent Contrarian.
Now Paridoxicology is a made-up word. I made it up. It’s the study of paradoxes. Well, maybe they should have a word because it fits. Would you just reference, Jimmy, about when everybody’s rushing for the exits with waving the white flag splattered with their own blood. It’s just – it’s horrible! I give up! I’m running out the exit! It’s a time for you to be the paradox, to be the confident contrarian, to walk calmly in the entrance door, pick up the pieces from those who fled like Chicken Little. Those are the people, those are the market-makers, aren’t they? Those are the visionaries.
You want to be as close to first as possible. And to use a real estate analogy, and you don’t have to be in real estate to understand this analogy – you hear it said often. Location, location, location. Right?
Travis Miller: Um-hmm.
Jimmy Vee: Um-hmm.
Frank McKinney: I don’t buy it. I don’t buy that mantra for real estate. I apply it to my vacation home, and I apply it to where I might want to live and raise a family, but when it comes to making money in real estate, I’ve never followed it. Never.
Why? First of all, rhetorically why do they have to say it three times? Why do they have to say the location, location, location? And the answer is, oh, they’re trying to drive a point home. They’re trying to just make sure you understand that location. I say that’s wrong.
Here’s my answer. My answer is they say it three times because there has to be a first, and the first to establish the location. The first to establish the city of Boca Raton. You’ve heard of Boca Raton.
Travis Miller: Sure.
Jimmy Vee: Sure.
Frank McKinney: That translated guys in Spanish is mouth of the rat.
Travis Miller: Yep.
Frank McKinney: Boca Raton, Malibu. Beverly Hills. Bellaire. Those were nowheresville [sic]. Somebody was first to establish the location. They were the market-makers, they were the ones who made the most money, and then the other two locations kind of come, you know, bouncing up behind the first location are just followers. They are there late to the party, their margins are compressed, and especially that last location guy. He’s the one left holding that contract for that last condo in Miami that was flipped six times, and now he’s upside down oh by $300,000.
It’s the same mentality where we quantify the Gold Rush of the 1800s. Most people see that as a bust. Look at all the ghost towns. You know what, guys? The person who got there first?! Who mined that goldmine, that vein of gold? He made a fortune! He was the first established location. All these other followers came late to the party. The guy that was last got blown up, went bankrupt, dust bowl. Ghost town.
So you’ve got to be the first. You’ve got to think about it in terms of that first location in real estate, or that contrarian, that guy who has that paradoxical approach to life that says I am going to do the opposite of the masses.
Travis Miller: That truly is a visionary concept.
Jimmy Vee: Yeah well, I think, you know, it’s said best by Reese Bobby, who is [Laughing] Ricky Bobby’s father in the Legend of Ricky Bobby, that movie Talladega Nights. He says if you’re not first, you’re last.
Frank McKinney: Yeah. That’s right.
Jimmy Vee: Yeah, you know what? If you’re not first, you’re last.
Frank McKinney: That’s a very funny movie. [Laughing] But it takes – doesn’t it, guys? I mean it takes guts to be first.
Travis Miller: Yeah, sure it does. And – well going back to the fear of the unknown. Right?
Frank McKinney: That’s right.
Travis Miller: De Mello.
Frank McKinney: Yep.
Travis Miller: Fear of the unknown. And that’s again on the first guy, you know, the first location is unknown. You know, it’s unknown before it becomes a location the first time.
Frank McKinney: That’s right.
Travis Miller: So that’s very interesting. Frank, this has really been a great conversation, and I think you truly are a visionary, and you have this unique breed of optimism and you know, future vision of what – you know, what things ought to be and what things can be, you know, if the right mentality and actions are applied. And I really appreciate you taking the time to share it with us, and with all of the people listening to this. It’s really been great.
Now, you know, there’s bound to be some people out there saying okay, this guy’s cool. How do I get more Frank McKinney? And tell them how they can do that.
Frank McKinney: Well what I would do before you decide if this guy’s cool or not, is to go to our website, which is an award-winning website I will tell you. It’s just my name. Frank-McKinney. That’s Frank-McKinney.com, and as I mentioned, I just released three books. The first book titled The Tap, which is a spiritual book. An inspirational book. It went to number one on Amazon’s spiritual self-help and inspiration. Expanding on the biblical reference from the gospel of Luke 12:48, to whom much is entrusted much will be expected.
The second book that went to number two was Burst This: Frank McKinney’s Bubble Proof Real Estate Strategies. And for those who want to be thoroughly entertained and want to draw out their creativity, I wrote my first young reader fantasy novel titled Dead Fred, Flying Lunch Boxes, and the Good Luck Circle. And you can go and you can learn a little bit about those three new books. It all came out on the same day and were written at the same time. It’s the first time an author has written three different genres and released them all at the same time.
And in my first two books. Make It Big, Forty-nine Secrets to Building A Life of Extreme Success, and then Frank McKinney’s Maverick Approach to Real Estate Success. There’s a ton of information on the site. You can see the pictures of this $29 million house that we just finished, a stunning photograph, and we’ll have a video tour there soon.
And you can see where we’re going to be appearing. We do travel around and talk a lot about the books and the concepts we talked about today. You can also see what our charity’s doing. The Caring House Project Foundation, which is building these entirely self-sufficient villages in the poorest country in the western hemisphere, which that being Haiti. Click on the Caring House Project link and see some of those pictures. That’s kind of why I’m on the call today. All the books we sell, guys, the proceeds, royalties, profits, what-have-you go to our Caring House Project Foundation, so if you do buy a book from us either on our website or from Amazon or wherever you buy it, know that the proceeds go our Caring House Project Foundation.
So enjoy your tour on Frank-McKinney.com.
Travis Miller: Oh, excellent.
Jimmy Vee: Awesome.
Travis Miller: Frank, thanks so much for being with us again, and I encourage everyone to get those books, check it out, and like you said, decide for yourself. Is this guy cool? And I think you’ll say yes, and of course, you’ll be helping out a good foundation in the process.
Jimmy Vee: I say yes. [Laughing] I’m ringing in for yes.
Frank McKinney: Thanks. Thanks, guys. I appreciate it.
Travis Miller: As always guys, this has been Straight Talk with Jimmy Vee and Travis Miller. I’m Travis Miller, the big idea guy.
Jimmy Vee: And I’m Jimmy Vee, the 5’ 9” marketing guy, and for all you gravitational marketing maniacs out there, thanks for listening, and if you aren’t a gravitational market maniac and you’d like to be, just shoot on over to our website at www.gravitationalmarketing.com.