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I finally had the great pleasure to interview one of the greatest names in real estate investing and education, Dr. Marshall Reddick. I met Marshall and his company in 2006 and since then have purchased several high income producing properties in various markets across the U.S. The Marshall Reddick Real Estate Network or MRREN began in 1979 and has taught over 50,000 people how to be successful real estate investors. They have created more millionaires than any other group of its kind. Their education and mentoring is free, check them out at: http://MRREN.com
Transcript
FutureMoneyTrends.com: Greetings and thank you for joining us at FutureMoneyTrends.com. I’m here with Marshall Reddick. He’s the founder of the Marshall Reddick Real Estate Network I have been investing with them for almost seven years now, very happy to be with them and working with them, and I wanted to sit down with Marshall and pick his brain for life success, as well as how in the world does someone start a real estate network as big as his. Its helped over 50,000 investors. Marshall, thank you very much for joining me.
Reddick: Oh, I’m so glad to be here, thank you for having me.
FutureMoneyTrends.com: Pleasure to be with you in person. I normally see you guys’ webinars online.
Reddick: Exactly.
FutureMoneyTrends.com: How did you start the real estate network. You’re helping people buy properties out of state, mainly Californians. Are most of your clients Californians?
Reddick: Yes, most of them are in California.
FutureMoneyTrends.com: But the properties are everywhere.
Reddick: Everywhere.
FutureMoneyTrends.com: How does this start? Take us back in time to the seventies.
Reddick: I came out here in 1970, and started teaching full time at Cal State Los Angeles as a professor in marketing, and I was looking for my own ways to be able to invest. And I had tried everything except real estate. And then in 1975 I bought my first property at Lake Arrowhead and it really really worked out right from the beginning. It went up in value about the same as my income at Cal State LA, I started getting tax benefits right off the bat. And whenever I learn something that’s useful and worthwhile, I really really want to try to share that with others, it’s the educator in me. So I began to do seminars at the community colleges and colleges throughout southern California and then later northern California. And I found almost right away that people could take a seminar, but they couldn’t jump from taking the seminar to being able to buy. And so I’m going to all this effort myself buying a couple properties a year was my goal, and I’m buying mainly in Long Beach because that’s where I moved to so I could be at the ocean. So I would do a seminar one weekend and the next weekend I would do a tour and we would usually have about 20 or 30 people come, and I’d say “I’m buying that one and that one, and this one and this one are the same deal, you can buy that.” And that seemed to really work. And then if it was a rental they seemed to need help with rentals, so I would find a property manager. And then some of them needed help with loans, and some of them needed help with insurance, so we kind of put that package together, people loved that. And we did that all throughout the eighties, and toward the end of 1980, like 89, it became very expensive out here, and people just couldn’t afford to buy here anymore. And I’m from Colorado and I’m going to church one day in the summer, and a realtor friend of mine came up and said, “You know they have head foreclosures for 30,000 dollars for five percent down,” and I said, “Let’s go look at them.” And they were the most fabulous deals I had ever ever seen. And so I put in four offers and got two accepted, brought them back. In those days we had Polaroid cameras, if you remember Polaroid, I’d pass em around at my seminars, the pictures of the properties that I bought, and people would come out with their credit card out and they wanted to buy them right then and there. And so I realized that we really had something. So we started doing tours, I got my light and my real estate license there, and I had a friend at church who lost his job and he got his license, and I would go out and take photos and bring them back. And then when it started to become so hectic, then I would let him do the pictures and then send them back, and a lot of people didn’t want to take the time to go out there because they were so reasonable. And they just said, “We trust you and we’d like to buy them.” So we found property management and everything and we put that into place. Then about in 1990 we learned about the foreclosures in Phoenix. And so we began to do tours to Phoenix every two weeks and I did those for about ten years, and those were a lot of fun and we’d have about 20 to 30 people go out every two weeks, and buy properties out there. And then we learned about Las Vegas and so then we started to take a look at Las Vegas. I have a very strong background in economics because of my PhD in business, so we really carefully looked at each area to try to see which areas are likely to go up and which ones are easiest to ramp and sell on. So we’ve always looked at about 15 criteria very carefully to decide where to buy. And then I think we went to Florida, and that was the furthest we had been away, but Florida started to become very good and so we started to do this in Florida, and I worked out on my condominium, and I ended up with about seven or eight people working with me in the day time and then I came home after teaching at Cal State LA and slept there. But it was a lot of fun, it was very satisfying, people did very very well, my properties went up like crazy. And then you know our model is to buy and then refinance, take some money out and then go buy some more and end up with a lot of property. And I ended up with over 300 properties that I bought myself and another hundred that I bought with other people doing an equity share.
FutureMoneyTrends.com: In terms of life success, you’re obviously a very successful man. You’re helping other people make their livings here with the Marshall Reddick network. You help all these realtors and investors. What are some key principles that you’ve found that when you reflect back on your life or when you’re teaching somebody, these young people that you have all around you, what are your key principles for life success that you could pass on to us.
Reddick: Okay, well for life success, if you look at our logo, it depicts three things. First of all it has houses. And that is the best way I think to become financially independent is through buying single family houses. Three bedroom two bath, two car garages in good areas, and then holding onto them and never selling them. And then also as part of that logo we have a heart, and that stands for health, and I think you would agree that your health is probably the most important thing. When you have it you take it for granted, but when you don’t have it you wish you had it back. And so I’m very much into health and I’ve written two books, “Live Forever Young,” and then a weight management program. And I’ve been into health for almost 24 years now and I really believe in health. And the final one is spirituality. I just, I couldn’t get along and I couldn’t do all the things that I could without god’s guidance, and I just feel that we really need to focus on our spirituality as well.
FutureMoneyTrends.com: Focusing on real estate, a lot of the properties, I noticed, I’ve bought a few properties with you guys, I call up the insurance, and to rebuild the house, it’s like 150 grand but yet I just bought this house for 75.
Reddick: Exactly.
FutureMoneyTrends.com: So how does this happen, where the cost of production is more than the purchase price of the house? Have you seen this over these three decades where you’ve been doing real estate? Have you seen this before? And what does this mean for an investor buying today?
Reddick: Yeah, it’s pretty exciting quite frankly, and I have not seen it to this degree. And it’s not true in all states, but the areas that went down the most in phoenix and Las Vegas and Florida and even California, those really went down, like sometimes 60 percent. Properties that were selling for 250 were selling for 60 after the crash. So I haven’t seen it to that extent, but it’s pretty exciting. Because you know you’re getting an incredible value when the new product that is going to be coming out is much higher then you know you’ve gotten a great value. And then interest rates are so incredible, best interest rates I’ve ever seen. When I started out in 1975 at lake arrowhead it was 12%, it went up 2% a year under the Carter administration and then other administrations and I remember buying a condo in 1982 and it was 22% interest rate. And I still did great with those properties. They had big negative cash flows initially, but I could refinance them later. So I was kind of used to seven or eight percent as being pretty good. And my parents talked about three or four percent interest rates, but I never thought we’d see it. And now we have and we still have really good interest rates.
FutureMoneyTrends.com: Out of the properties that you guys have covered, do you have any favorites that you really like? That you look at the economic situation, the criteria you talked about, or is it just about the people?
Reddick: Right, and you know the nice thing about us is if we were just California realtors, we would just try to sell you California property but we don’t work that way. We feel that we have the whole United States, and we look at all the economic data and then we come up with the best areas and right now we’re in about twelve different markets. And I don’t really have a favorite, I’m always looking for new areas as the other areas get a little expensive. We’re getting into Florida now which has really really terrific options and we’ve always liked Tennessee and we may be starting to get into North Carolina and we may start moving some more now even in California because people are interested in trading up in their own homes, and maybe buying some investment property as well. But we’re always just, you know, looking at all the markets and saying, “Alright, number one where should we be?” And then we go in those areas and we have to find good realtors, and that isn’t the easiest thing in the world, and then we have to find good property managers, which is even harder. And finding good lenders is a real challenge as well. Thank goodness we can go back in many cases to the people that we worked with before, and they’re still in business and they’d love to work with us again. So many of the people who are working with us have been with me for ten to twelve years, and we feel very comfortable with their selection of properties and so on. But the average person just couldn’t do that themselves, they couldn’t do all the research and then find a good realtor and then find a good property manager and then find a lender and insurance. We have fabulous insurance. We’re the only group with Safeco that has a group insurance program. We have one phone number, and it’s all ours and they know it’s a network member, and that’s an incredible advantage in being able to get insurance on your properties.
FutureMoneyTrends.com: Yeah. If you had to do it all over again. There’s a lot of people, young people, who are struggling to find jobs. So it’s a great question to ask a millionaire. If you had to do it all over again, what are some key things that you could share with us on what you would do to rebuild something like the Marshall Reddick network, a great business?
Reddick: No, absolutely. And you know, I started the first entrepreneurship program in southern California at the undergraduate level back in 1975 for that reason. I personally feel that it is so much more rewarding and satisfying to work for yourself than to work for somebody else. And I just wish young people would think more in terms of that. And there’s wonderful courses offered by small business administration, there’s wonderful courses at community colleges and universities now. Just pick up a few courses on how to do a marketing plan and a business plan. Just look for a need, that’s all you need to do. When you ask me could I do the same thing today as I did then, it’s easier today because there’s so many needs out there, and that’s the secret to successful entrepreneurship. It’s not what you think people should want, it’s what they think they want. And you just go out and you ask them, and you come up with an idea and you ask a bunch of people. And just say, “Is this something that you desire and you want and you need?” And they’ll tell you. They’ll be able to tell you what they’ll pay for it, they’ll be able to tell you to the degree that they need this service. And they’ll just say, “No I wouldn’t pay for that, that’s ridiculous.” Shark Tank is an excellent program for seeing new ideas and what the sharks look for in a good investment. It’s a really really good way. And they say that millionaires usually lose all their money a couple of times, and then they always get it back and then some. I really truly believe that. That if you’re a true entrepreneur you’ll always figure out how to find a product that fits somebody’s needs and how to be successful with it.
FutureMoneyTrends.com: Do you have any mentors or people you listen to or like to read that you could share with us?
Reddick: Yeah, if you were to ask me what’s the most important thing in success, I would say it’s to find good mentors. I have been so blessed. My life has been one miracle after another and sometimes we should just talk about the miracles that have happened in my life. But I just had the opportunity to work at a dude ranch, he was a college professor, he taught at Denver university, he owned real estate, he loved real estate and basically that’s where I picked up my passion to be able to work for myself and have my own business and get into real estate, and the desire to get into education. And then it’s been one mentor after another all the way along I had Ross Perot when I was working on my PhD down at Texas Tech University. He came to campus, and I introduced him to the student body and I had lunch with him, and spent some time with him. And he’s been a wonderful wonderful mentor and it doesn’t have to be sitting across from them, it can be books that you read. Zig Zigler in the past has been so great. Tony Robbins is of course fabulous, and you can listen to their tapes. I listen to tapes going in and out of work every single day, and I feel like they’re mentors even though I may not have ever met them. It’s very important. But then in real estate, you know I met Albert Lowry, who was the guru of the day, and I took all his seminars and I read all his material. And he’s become a good friend over the years. But it’s just so important to have really really good mentors.
FutureMoneyTrends.com: Marshall, thank you so much for your time. You’ve been very helpful.
Reddick: You’re so welcome, thank you for having me. Appreciate it.
