Category: Jewels of Wisdom Newsletter

Who Was Ed Kelly to me?

Ed Kelly was the son and namesake of my grandfather, Ed Kelly, whose very old real estate sign is pictured above. Both were in real estate when I was growing up. I remember looking up to Uncle Ed and hoping one day, I too, could be in real estate.

Uncle Ed was a salesman throughout his life, selling everything from advertising, to HVAC equipment, and of course, real estate. In fact, Uncle Ed was the only person in my family to pursue sales as a career, as a profession. His example showed me that I too, could have sales as my profession, as a career.

Some of the greatest barbeques I remember as a kid were at Uncle Ed’s house. He lived in a nice house backing up to a golf course with Willow trees in the back yard. That back yard was full of family-Ed left 3 sons and we had dozens of cousins. Everything felt so perfect back then.

It was Uncle Ed passed that sign along to me a few years back-some of my long term readers might recognize it from REI Diamonds podcast videos. It is a piece of my family history. A family history that made my path in real estate & sales seem so possible & logical as a young man. Grateful to have known you, Uncle Eddie! May you rest in peace.

Well, let’s wrap this up with another win.  My wife & I also found out this week that we are expecting a baby boy!! Cheers!

And find a way to win this week too!

Here are the Deals I’ll Do

Our business is buying & selling real estate throughout the US. Some we’ve developed, some we own long term, and most are sold in under one year.

Single Family Houses & 2-4 Unit Apartment Buildings – The bulk of our business is buying & renovating homes which are sold to owner occupants who will make that deal their personal home. Promoting home ownership-that’s the best feature of our business.

• We buy houses in nearly any market in the country.
• If you have a house needing repairs for sale, please reply to me directly. If it is of interest, I will have someone on my team prepare an offer. While I am involved in decisions on every single family deal, our business is setup to handle a high volume of these deals.

Industrial & Self Storage – We own many industrial properties long term, probably to be sold sometime in the next 5-10 years to harvest profit. This includes self storage (some we built ground up) and small bay/flex space warehouse.

• We’d buy more of this product – if value add exists (vacancy, low rents, or needs repair), the size is at least 20,000 sq. ft. and is located in a Metropolitan Service Area. Tertiary markets will not work.
• If you have an Industrial or Self Storage deal for sale, please reply to this email-I personally handle these.

Manufactured Home Communities (MHC) – Here again, the business model promotes home ownership. MHC’s often have strict rental restrictions limiting the ability to bring lot rents to market quickly. Our business model includes financial coaching & goal setting with tenants who desire to own their own home. As they achieve that goal and buy a home, the vacate their unit and the incoming tenant will be at market.

• We’d buy more of this product. MHC of interest would be below market rents and a minimum of 75 lots or enough expansion land to achieve that scale.
• If you have an MHC for sale, please reply to this email-I personally handle these.

Deals I’m Working on this Week

This week I’ve met with 2 brokers who also read this Newsletter working on deals which interest me.

Stephen Spivak, of McCann Commercial & I had lunch yesterday after viewing what may become my home. He’s taken the time to hunt for & maybe found that Off Market Main Line house I’ve written about over the past few months. He normally doesn’t do residential, but if you are a developer looking for off market land in the Philly region, I’d be glad to make an intro.

Joe Elizondo, a Chicagoland broker sold me an off market 4 flat earlier this year. This past week, he & I met with a business owner generating $5M net profit on $20M gross sales. This business caught my attention due to the scale of the current profit-however is not a done deal yet because that business is heavily reliant on the owner’s presence.

Instead of his idea to sell for $20M, we are now working this deal in a way where this business owner may receive a large payout now, maybe $15M, and then stay on board to receive another $50M-$70M payout upon the next exit-likely 5-10 years down the road.  Know any business owners seeking a sale like this?  Reply to me directly and let’s get that convo going.

Thank you Stephen & Joe for the interesting deals.

Thank YOU for continuing to read the Jewels of Wisdom newsletter.

Let’s close some deals this week!!

How I’m Dealing with Record Interest Rates

When interest rates rise, there is lower buyer activity in the market.  Supply & demand shifts slightly as the monthly payment for a certain price point increases slightly.  For example:

• $300,000 mortgage at 6.5% payment is $1,896.20
• $300,000 mortgage at 7.5% payment is $2,097.64

As you can see, it now costs the buyer more money to buy that same $300,000 house. This reduces the number of buyers able to qualify for that home, even if only by a small amount.

Add in the coming Winter market and we are looking at short term risk here of slowdown. Buyer activity drops each Winter AND Buyer activity drops as interest rates rise.

While I believe this is temporary (I predict that we are likely to have one more .25% rise to allow a few rate reductions early next year), I am still adjusting my strategy slightly.

1. Do MORE Due Diligence – before accepting any “Pre-Approved” mortgage buyers. Buyers may have old approvals and might be reaching to buy my listing/property. I’d rather discover that on day 1, than day 35 when they cancel and I have to start over with a new buyer.
2. Price Drops Right Now – Since it is Winter & higher interest rates, I am more aggressively dropping the asking price on our finished flips which are currently on the market.

The way I view price drops-I am paying for the privilege of more buyer interest through a price drop. Right now, this weekend, I’m willing to pay MORE (by dropping the price further than I would if rates were flat) to attract the smaller number of buyers currently in the market to buy my house.

If you have any retail listings currently on the market which aren’t getting interest, it might be time to revisit the price more aggressively than you might have before the rates increased.

Update on the House Search

We have an offer submittted on a house set on 3 acres with a stream running through the back yard. It is a strong offer, above ask, no mortgage contingency, no inspection, and no septic inspection.

Some folks on my team here at Diamond Equity are reading this right now, probably in shock, for my willingness to accept this type of risk.

The lesson here-when the property is just right-you may have to offer more than you were comfortable offering-if you want to win.

I’ll keep you posted on how this turns out.

How to WIN 2027

The real estate business is all about momentum. Deal cycles take 3-6 months on the quicker end (brokerage, house flips) and 5-10 years or more on many commercial development deals or even long term rental property.

My team is buidling momentum for 2027 RIGHT NOW, in the middle of September because we understand how to create momentmum.

Deal Timeline – Illustrates Deal Momemtum

Here’s how this applies now, in Sept, to activate your deal flow for 2027. First, let’s map the timeline of a deal:

• Day 1 (Sep 26) – You learn about a deal
• Day 5-7 (Sep 26) – You’ve presented your offer
• Days 7-30 (Oct 26)  – If it’s a fast deal, you’ve negotiated an acceptable offer
• Days 31-60 (Nov-Dec 26) – You close on, and own that deal
• Days 61-150 (Dec – Mar 27) – You’ve completed your renovation & gone to market
• Days 150-210 (Mar-May 27) – You’ve gone to market & accept an offer
• Days 211-270 (May-Jul 27)  – The buyer has gotten their mortgage and closed the deal.

As you can see, we are perfectly timed, right now, to buy deals which will hit the Spring Market (when pricing is often reaching it’s yearly high) and provide income by the middle of next year.

Considering this timeline, which doesn’t account for longer term negotiations where sellers aren’t so agreeable in the first 30 days, we might actually be LATE for 2027. I bet you were even questioning my logic, my earlyness of this topic when you read this subject line….

Here are Your Action Items to Win 2027:

1. The time is NOW to build your momentum for 2027
2. Make 6 or more Offers with Urgency THIS WEEK.
3. Repeat that process again each week through 2027
4. REMEMBER those offers which deserve long term, strategic follow up.

Momentum in Negotiation 

EVERY DEAL EVER DONE BEGINS WITH ONE THING: AN OFFER

However, most junior, inexperienced deal makers think you make the offer and get the deal within a few days. There are enough of these “right now” deals available to make a successful career in the business (Here are 48).  However, this is elementry and NOT how the Deal Making Masters think & operate.

The Deal Making Masters recognize that HALF the available deals require the momentum to build -often long after that first offer is made. This is following up, keeping the conversation going until the deal is made.

The Master Deal Makers spot the pattern of a Deal to be made and then pursue that deal regardless of how many times the seller says “no” or the broker tells them “they’ll never sell for that price”. The Master REMEMBERS which deals in their system fit this pattern and stays on them. They work them until they’re closed.

The ONLY acceptable reason to forget about those deals you’re working on would be once the property has sold and SETTLED. Until then, the deal is in play, REGARDLESS of whether that seller says no, or even responds to your calls/emails/texts.

Most real estate investor are working only on the “right now” deals. Those which sign within 30 days of the initial offer. Allow me to push you to BE THE MASTER – recognize and latch on to those select deals that show signals of becoming a deal REGARDLESS of the current price that the “counter offer” has returned.

Becoming a Master, choosing correctly CERTAIN DEALS to continue working long term, is the key to doubling your income. Choose too many and you dissipate your enerygy and are ineffective. Choose too few and you miss the exact long term deals to which I am referring. Choose perfectly and you maximize your deal/effort results. THIS is how you WIN 2027!!

Lessons from a Top NJ Shore Developer

Yesterday my wife and I attended a few Open Houses here at the shore. The sport of vacations here on 7 mile island IS real estate.

Just after we arrived, one of the most prolific Jersey Shore developers walks in to check out the build himself. He did not build the house we were both walking through. I’m leaving his name out for privacy reasons, but you likely know the name & brand if you’re in Jersey or Main Line PA real estate.

We chatted for a while and I came away with 2 lessons:

1. Successful Business Operators are ALWAYS ON.
2. Location, location, location

First, let’s talk about ALWAYS ON. Here is a guy who certainly “has enough” in life. More than enough. Yet, on a Saturday during Memorial Day weekend, here he & I are both randomly walking a  new build neither of us have any intention of buying. Why?

Well, I believe for us both, is that we simply love real estate. Buildings, the brokers, the builders, the conversation. This must be the type of thrill folks get from following & talking about their local sports team. For us, that thrill comes from the business of real estate.

The other benefit here is market research. What is the competing product available in the market? Have you ever scheduled showings of houses you never intend to buy, simply to better understand the market from your buyer’s perspective? Or even called competing commercial properties available for lease to understand the rents being quoted in the market??

Now, Location, Location, Location

As we chatted for a while in this brand new house, my wife had mentioned several towns where she has considered houses. Some with 40+ acre parcels.

Our new Developer friend stopped, somewhat seriously, and STRONGLY steered us toward one of the towns she mentioned. Wayne, PA. His reason? He expects values to always climb in that highly constrained, desirable market. Location, location, location.

Then, to drive home that lesson further, as we start to break away into different directions to tour the house, he calls us back down the stairs, pulls us in close, and whispers:

“I am definitely NOT risk averse, but building this house, in this location is the riskiest move I’ve ever seen. Remember, location, location, location.”

Knowing the caliber of record breaking, exclusive homes this gentlemen builds, this lesson definitely hit differently as we stood there checking out this $4.5M home together.

On that note, do you have any Wayne, PA or similar Main Line, PA prime locations for me to buy?  1 Acre+, prefer something move ready, but willing to tear down & rebuild or renovated.

Transform Communities, One Property at a time.

This is really the operating principle of EVERY investor & developer who buys a property and invests cash in improving that property.

When you buy, fix & sell a house, you’ve caused transformation.

When you buy land & develop a building, you’ve caused transformation.

The transformation is made possible when you:

Join the Team – and Create deals with me together. Thank you to the dedicated partners here at Diamond Equity.  You’ve committed to the company and I appreciate you.

Invest in Deals – Many reading this are currently invested in Diamond Equity deals ranging from house flips to ground up construction. Thank you for your faith in our team and investment in our deals. These investments have assisted us in reaching scale over the years – transforming more than 250+ deals per year, for more than a decade.

We currently have a few more Private Mortgage Investment opportunities/deals coming up ranging from $50,000- $250,000. If you want first dibs on one of these, they pay 2 points and 10% interest (roughly equals 12% interest while we have your money. Reply to me directly if you want to discuss funding one of these.

Buy a Deal – To those who’ve bought, or agents who’ve repped a buyer on one of our deals, Thank YOU! Our business model runs on the exit-pays the investors back and provides those partner shares to each member of the team who created & operated the deal to completion.

We occasionally offer deals to our network prior to beginning construction and doing the deal ourselves. We currently have 38 available for sale here.

Thank you for continuing to follow us here. Even if you haven’t fit into one of those mentioned deals above, I APPRECIATE YOU for giving me your attention each week to read these emails. You never know when that day comes that you end up selling me a deal, buyig one of our deals, investing in one of our deals, or perhaps even joining our team.

I pray that our relationship increases the money in BOTH of our pockets!!

This is my #1 Book Recommendation for Deal Making

Before I share the book, I’ll give a bit of context. I’ve recommended this to many people over the years. I’m sure less than half have actually followed through with reading, and less than half of that half really got the point: How to apply what you learn in the book to go cash checks from making deals.

To be honest, I used to hesitate making this recommendation because it appeared so powerful in my own business I didn’t want anyone else to know about it. It was like a secret superpower that opened the door to building a continuous flow of solid, profitable deals.

Here’s why most miss the point: Most people make deals and prefer short cuts. There is a process to making a great deal, yet most just want to make an offer, maybe make a follow up call or two, and win a deal. Yes, I want that too, but that is probably HALF the deal flow available in the market place.

To earn that other HALF of the deals which cross your desk, it takes some additional effort. Strategy. A complex process which creates the desire in that seller (or seller’s broker) to choose your offer over all the rest.

Sure, you can maybe win with the highest price, but Master Deal Maker’s understand it’s about MORE than just the highest price. Anyway, I’m not going to give you each of the secrets I’ve extracted from this book here. I’ll share the book, but the discovery of the Jewels of Deal Making Wisdom are your job.

Winning through Intimidation, by Robert Ringer.

Pro Tip: Be sure to get one of the older editions from 1980’s or prior. One with yellow pages, very hard to get.  The later versions were toned down a bit by the author and lose a bit of the edge that can be gained by the early versions.

If you’ve read this far, congratulations. I actually laugh inside a little bit at the number of people who will miss this sentence here. Those are the same folks who’ve ignored the recommendation (sometimes made many times).

It is your patient attention to detail that will allow you to gain the value that I have from this book. It is also that same attention to detail that very likely ALREADY makes you a Master Deal Maker.  If this sounds like you and you haven’t already earned $150K+ per year in real estate, we should probably talk. I can help you get to the next level. Please reply to this email.