So, here's a question
Are we real estate investors taking advantage of people?
I mean if we're intentionally targeting our marketing efforts towards people
that are suffering because of unfortunate life circumstances
is there something ethically or morally wrong with what we do?
Obviously, we're offering pennies on the dollars for these properties
and the whole reason why we're doing it is so that ultimately we can make money.
So, is this misguided or wrong in some way?
For me, no.
I don't think that being a real estate investor is immoral in any way.
There's an incredible book called "Thou Shall Prosper" by Rabbi Daniel Lapin
that really helped me come to some clarity on this issue.
The entire premise of the book is to provide non-Jewish people an insight into the Jewish worldview.
Especially when it comes to money and business.
Now I'm not Jewish but the fact is whether we like it or not
the Jewish people have one of the smallest populations on the planet
but they hold a disproportionate amount of the wealth patents and Nobel Peace Prizes
compared to the rest of the world.
So, for me I feel like that merits some attention.
In the book, Rabbi Daniel Lapin makes a case for the good of capitalism
by providing a story about a street vendor.
Say a street vendor saw a person throwing away a chair
and offered to pay that person $5 to take it off their hands.
To the person throwing away the broken chair this is a huge win
because instead of simply throwing it away they can actually walk away with money instead.
Now say that same vendor had knowledge on how to fix that chair.
So, he went down to the repair shop to get some supplies and made the chair functional again.
Then after fixing it he found a couple who had just bought their first house
and who happened to be on the market for a new chair.
They had budgeted $50 for purchasing one from the local furniture store
but the vendor offered his for only $20.
The couple was thrilled because they got a great looking chair
and saved $30 off their entire budget.
So, can you see that when business and capitalism is done right, it's actually a win-win for everybody.
The original owner got $5, the vendor made $15 minus repairs
and the couple got a great looking chair for $30 less than they were planning on spending.
I feel like us real estate investors function very similar to the role of this street vendor.
For a motivated seller liquidating their property is a solution
or at the very least an aid to a painful problem in their life.
We offer the ability to free up thousands of dollars for them
despite the fact that our offers are steeply discounted.
If the motivated seller has a property that is in desperate need of repair
and they don't have the skill set to fix it up
a lot of the times they're stuck paying taxes on a property they can't even use.
And most realtor's won't touch distressed properties like this because it's a lot of work to move them
but they ultimately sell cheap so they don't get much commission in accordance to their effort.
So, we real estate investors actually offer some pretty big value
when we are able to purchase troublesome properties
and take the headache of dealing with them away.
At the end of the day, we are truly providing a service to people
allowing them to quickly cash out their property
and this is a great service for the right person under the right circumstances.
Now of course, in the narrative of the street vendor
if he had ill intentions and somehow stole the chair
or had used some strange manipulation tactic to convince the original owner to sell at a discount
when the chair was perfectly fine to begin with,
then my opinion I think that would be unethical.
When it comes to motivated sellers,
I'm very intentional to disclose the fact that I'm a real estate investor
and I say directly that I unfortunately cannot pay full market value for any property that I buy
because otherwise my numbers simply don't work.
I then proceed to tell them that even though this is the case,
I'm an all-cash buyer and I can close very quickly
and for the right person, it's great working with me
because I'm like the easiest real estate deal they'll probably ever do in their life.
And with this transparent approach I can honestly tell you that
I don't struggle to find deals in my business.
As I wrap up this video I really think that
this whole conversation boils down to intent.
If in your heart as a real estate investor
you're legitimately trying to rip people off from one reason or another
then I think you need to get that sorted out.
It's never a good idea to intentionally hurt people.
But as long as you keep it at the forefront of your mind
that your goal as an investor is to create win-win situations
and you strive for that every day
I believe you're actually serving the world in a pretty big way.
That's why for me I'm a pretty strong proponent for entrepreneurship and capitalism.
I believe that when it's done right
everybody wins.
I hope what I shared in today's video at the very least
gave you some perspective on how real estate investors
can truly make a difference in what they do.
Thanks for watching and I'll see you next time.