Welcome to the Eventual Millionaire Podcast. I?m Jaime Tardy and today we have Armando Montelongo on the show. Armando has been the start of the number one hit real estate reality show called Flip this House and he is the author of a great book called Flip and Grow Rich. He has a great heart and mind approach to real estate investing and has an amazing rags to riches story that I can?t wait to talk about. Thank you so much for being here, Armando.


ARMANDO MONTELONGO: Thank you, Jaime, for having me. How are you?


JAIME TARDY: I am excellent. And I just finished your book. It was an excellent read. You told both the story of your family going from living in a garage on food stamps to multimillionaire which was an amazing story that I?d love to get into but it also laid out the steps on how to be successful in real estate flipping. The one question that I had for you in reading the book is you were already so successful, what made you write the book?


AM: Well, I think that when I was really, really broke and living in the garage and on food stamps, one of the interesting things was, my mentor told me that to get into real estate and at that time it was before the internet was as hot and easy to use it as now, he had me move from California over to Texas and I remember going through Phoenix and I went and was walking behind a pick up truck there in Phoenix and the pick up truck was a Ryder truck that we had our furniture in about 6:00 in the morning and my wife and I were having a conversation and I made a promise that if I ever learned the secrets of becoming wealthy that I would share them with the world because I had gone through so much frustration being so poor and then when the TV show Flip this House came out, I literally had tens of thousands of emails going Armando, I feel what you felt. I?m having tough times, I?m struggling, please help me. So that really inspired me to go out there and write the book and keep that promise of helping individuals out.


JT: Wow, so even way back then when you were broke you still had the mindset of you were going to be successful if you?re talking about teaching it to everybody even before you knew it. That was great. How did you have that successful mindset even when you were broke?


AM: Well, I think what it was, you know, I appreciate the compliment of a successful mindset. I think it was a frustrated mindset meaning I was willing to do whatever it took as long as it was legal and moral and ethical to be able to go out there and make it. I was so frustrated and so scared that it was almost like saying a prayer. Kind of like hey if I make it I promise that I?m going to go and do this. So it was more like a foxhole prayer than was probably a successful mindset just saying hey just let me go out there and make it and then this is what I promise I?m going to go do. And so, I think that if you clearly make a promise, even if it?s at time of desperation, at some point in your life you got to go back and keep it.


JT: That?s excellent. That?s really good to know too. It makes us not feel like you are the huge guru that hasn?t had these issues just like everybody have.


AM: You know I think that we get issues out of fear. To say that I did not have fear would be an inaccuracy. To say that I have doubt would be a lie, right. I had total fear. I had total disappointment in my life prior to that and I had feelings of anxiousness and really the question can I really do this? Can this really happen? Is this pie in the sky? But by looking into my mentors and tell them exactly what they told me I would go do it helped me to almost immediately come over the fear. I did have doubt but I listened to what they said.


They kind of gave me a step by step plan on what to go do which made making money and getting myself out of a bad situation and becoming wealthy much easier where most people are just kind of running around with chickens with their head cut off with no direction whatsoever.


JT: So when you were in that bleak time, did you know that you would eventually become a millionaire?


AM: You know, I had deep, deep, deep, deep down, way deep down, Jaime, I had this like I got what it takes. I know I have what it will take and I know deep down I have what it takes. I just don?t know how to get there. What I found with so many of my students, people I teach now, they have that deep belief like I know I can do it if I just had the right mentor, opportunity and system to be able to go do this. Most people don?t ever react on that instinct. In fact, I was told in a famous magazine one time the average millionaire has one $1 million idea a year. It should be the average American has one $1 million idea a year but they do nothing with it. And so I had that deep, deep belief way down but I just felt different and I could do it and what I found is so many of my students who come out there and want to be successful they go man Armando had a deep seeded I know I can do it if I just know what to do.


JT: That?s great. So what do you think stops the entrepreneur or the average American who has one $1 million idea, what stops them from actually having a $1 million company?


AM: Well, I think the first thing is they don?t know how to do it step by step. So if people know how to do it step by step and in chronological order, the ABCs of how to of money exactly, and it?s not just motivational and voila, right. We actually have a systemized plan for it then they can go out there and follow really a roadmap to success.


The next thing is I think people get really scared. They doubt themselves because socially we?re taught that it?s pie in the sky. We are also taught other people are greedy. Socially we?re taught that money doesn?t grow on trees and in the valleys people just plant the wrong seeds, right. So I think that where the challenge is most people simply let their fears take over rather than their gut instinct and this is the biggest distinction.


There is a giant distinction between gut and instinct and what most people think is reasoning which is really nothing more than fear. That initial thought process that you have, that initial I can do this, that?s your gut instinct that you can go out there and make money. And then people go and try to do it themselves and become logical and that?s when the fear takes over and most people listen to secondary voice versus the initial voice. So I tell people so number one you have a master passion. That?s identity.


Then when you have master passion that?s when you take immediate action. That?s when you immediately do something to make a step or progress and then number three, you have to have continuous education because the economy, the real estate market, times are changing and they?re changing quickly which is a good thing because you can make a tremendous amount of money but if you?re not staying educated on it you?re going to get caught up in a whirlwind, you are going to listen to other people who don?t have money and you?ll get left behind.


JT: So how does taking immediate action, I actually ended up watching a video on you that said all millionaires take action now and it was a great little clip of you doing that. You think that?s what helps people get over the fear that they have?


AM: You know, it?s interesting, there?s a photography called curly photography, right and what this photography does is it takes pictures of ray of lights around your body according to the energy. Now I?m not a woo-woo guy so this is not woo-woo, this is scientific, okay. So if somebody is angry they have one ray of light around the body. If they?re really, really happy they have a different one and if they?re sad they have a different one.


Well what happens is when we have massive passion, it actually has been documented that we have a certain ray of light around our body that is a protective layer. When we have a massive passion. It?s almost like a protection for us. It?s that gut instinct though as I mentioned to you earlier and what happens is most people don?t see immediate action. When you have this massive passion, that?s one of the things of life. That?s why a mother can pick up a car off of a 7-year-old child and pull a child to safety because she has massive passion and then she takes immediate action.


But most people get that massive passion, get that million dollar idea and then what we go and do is they go and second guess themselves and they think of something somebody else told them or if they can?t. So they don?t take immediate action so then they don?t have that protective layer around themselves and what happens ultimately is they don?t do something, they don?t take the steps which is action steps to help them go out there and become successful and become a millionaire.


JT: I think what you?re saying too is people saying that you can?t do it plays a big part, right, and I was reading in the book and it said that you had been called a lot of names and you even called yourself names occasionally. How do you get past that and not let it stop you? Is it just action? I mean is that the only thing that we need to do in order to move forward?


AM: Well, action going in the wrong direction is certain failure, right? So it?s kind of like if you are in a room and somebody blindfolds you and sets the room on fire, that doesn?t mean you?re going to make it to safety because you took action trying to get out of there, right. So you really need a step-by-step methodical process in order to be able to go out there and do it.


So what I did is I listened to my mentors. I have four multi-millionaire mentors. I listen to what each of them said to be able to go out there and make money. Now the great thing about these mentors is they are very, very humble men. They kind of stay behind the scenes of their own success but they look on my success and they like it and think it?s kind of funny and humorous with a TV show and the things that I?ve done. In a sense, that was the craziness that?s on the show but they also feel motivated and inspired by how many people that our company has gone out there and helped.


But the biggest thing that I remember my mentor told me, he said, ?Armando, everyone thinks that knowledge is power. Knowledge is not power. Properly applied knowledge is power.? Which means you have to have accurate and accurate education about whatever you are going to do whether you are going to go out there and be some sort of a computer engineer or whether you are going to go out there and be an athlete or whether you are going to go out there and be a real estate investor, the thing is you have to take action according to the correct steps in today?s marketplace.


JT: Well how could find these mentors because multi-millionaire mentors usually don?t automatically talk to broke people. Were you broke at the time when you got these mentors?


AM: I was extremely broke and I sought them out. Here?s the interesting thing, these men, they had made a lot of money over 30 to 40 years but I didn?t have 30 to 40 years. I needed to make money now just like most people. You need to make money right now. So what I did is I kind of put their information. I stacked one on top of another on top of another on top of another and then I put together what worked.


I took out those things that didn?t quite work, right. I was able to go and go from being $50,000 in debt to making a million bucks my first year and several million dollars in three years and really turn decades into days over a very, very short period of time. What I found is most people, it?s difficult to go out there and find those mentors and mentors don?t have the time to do it and they don?t have the, people don?t know how to go out there who don?t have money, how to find a mentor and the reality is most mentors don?t want to spend the time with individuals because they?re not committed enough.


There?s many multi-millionaires who would like to help people but there is two problems, they?re really, really busy or people are not committed enough. So what we do in our company is we actually created a mentorship program for those people who go I want to make money in real estate but I don?t know how to go out there and do it but I?m committed to doing it so we?re like find a mentor. So we make ourselves available through a mentorship program for people so people know it?s easy to be able to find a mentor for them.


JT: Oh so you right now act as a mentor for other people and do coaching and stuff like that too.


AM: You know, what?s interesting is I just did a three-day bus tour in California and we had several hundred people come to this bus tour and we taught them for three days and we showed them how to do the deals, where to get the money. I let them use my realtors and my contractors, people from all over the country so that they could learn how to do it hear and then go back to their marketplaces and do it even if they think they?re in a bad market.


And the interesting thing is I told everybody, I will make you on e promise that at the end of three days you will know how to flip a house the way that I flip a house. So we have various mentorship programs. Not everybody can or has the ability to travel to California so we also have phone mentorship programs. Now not everybody qualifies for them so here?s the thing, just because you can go pay for a mentorship doesn?t mean you qualify for a mentorship. So we want people who really want to go out there and do something with the knowledge and information that we give them.


JT: That?s a key point because I think online in general, there are books and CDs and tapes and they don?t do anything if the people don?t do anything with them and therefore you could get a bad rap because of that. So what made you decide to do a qualification? Do you only accept people that are really willing or that you feel are dedicated enough or how does that work?


AM: Yeah, we want people who are going to be willing, people who are going to take action. When I tell you that all mentors take action now, it?s a huge belief system that I have and some people go well I?m not a millionaire. Yes but you can act like a millionaire. We?ll show you what that looks like but we don?t want people to think they are part of the program go oh that was cute and interesting knowledge. We want people who are going to go that is powerful knowledge because it tremendously really is and I?m going to do this and this and this because the feeling that we have as a company, when people go out there and change their life.


Somebody like the Kauffman family who has gone out there and done something along the range in the last year of five deals and made close to a couple hundred thousand dollars off of these deals and they are not spending a tremendous amount of time, they?re not having to quit their jobs and that extra money is changing their life and teaching this to their children and now they?re telling their children that money does grow on trees and they?re planting different seeds. These are the kinds of people that we love and here?s the thing is most people go geez I don?t know if I have that in me. The reality is through our qualification process we?ll see if you have it in you and if you do, then we can show you how to pull it out of you and that?s one thing a mentor does. A mentor is able to pull the best out of a person even if that person doesn?t quite know if they have it or not.


JT: That?s excellent advice. Now what do you say to all those people that went into real estate. I mean I know some personally, they went into real estate and lost their shirt either trying to flip a house or just trying to hold it for an investment. Right now they?re not doing so well. So what do you say to those people that have tried it and lost.


AM: You know, a lot of those people are what I call accidental investors. In other words, they saw a TV show like mine and said I can go out there and do that and they go out there because the housing market is booming and they went out there and bought a house in ?04, ?05, ?06, they started buying at the top of the market and the marketplace fell out from underneath them. Had they listened to all the signals that were going on, had they known how to read the signals like the way my mentors taught me how to read a signal, they would have known back in ?03 what was going to happen over the next several years.


The other thing is most people who went out there and tried to do a rental or do a flip and they lost their butt way too high, they did not get educated and they end up losing their butt because that?s why I say you have to have continuous education. What we teach in our programs today in 2011 is different than what we taught in 2008, 2009 or 2010. Now is it completely different? No. But do we make tweaks every year for the marketplace and so the people know how to do it in their backyard no matter whether they live in Florida or Michigan or New York or Chicago or the Bay area or Southern California? Absolutely. So we custom tailor it for people?s backyard and for the year 2011.


JT: Excellent. So what are some of those tips and advice that you are giving to people right now if you don?t mind sharing?


AM: Well what?s really funny is one of the things we tell people is we say, ?In real estate you buy low and sell? and everybody goes ?High? and we say, ?No, that?s what everybody did and lost their butts in ?06, ?07, ?08, right, ?09.? We say you are going to buy low, fix it up a little bit and you?re going to sell low. So if it doesn?t make sense, I know it will for you, Jaime.


What happens is we go into marketplaces and I might find a property that all the other properties are comparable are selling for $200,000 and all those houses were built in the year 1984. Well I?ll buy that same house in the year 2011 and the house was built in 1984. We?ll go over there and purchase the property for literally like $0.50 on the dollar. We?re talking like 100, $105,00. We?ll go out there and put 15 in repairs, $15,000 in repairs. Now we show our students how they can go do this with no money out of their pockets whatsoever. Even if they don?t have good credit. I even had a student with Chapter 7 bankruptcy before he came to our program and just a few months later flipped his first house and he reported to us that he made a $30,000 profit on it.


So you?re into the deal for $100,000 purchase, $15,000 in repairs and you can sell the property for $200,000. So everyone is like sell it for $200,000. I said, ?No, sell it for 185.? You?re selling that property for about 10 percent less, a little bit more than 10 percent less than all the rest of the property that would go for $200,000. But the property was remodeled in 2011 and all the other properties look like they were built in 1984. So you have the best looking house in the neighborhood. You have the least expensive house for sale in the marketplace, whose house are people going to buy?


They?re going to buy the educated real estate investor?s house. So now that?s a more blah technique that we teach and then we show you how to really turn if you?re upside down and how to really horn in so you know how to walk to a house and literally within five minutes you can be within $1,000 of my final budget numbers and that?s power.


JT: So okay, I?m listening to you and I love what you?re saying. It?s just hard. I?m thinking of my listeners who go wow that sounds way to good to be true. Not having any money out of their pocket. I mean they would have to go into debt I?m assuming in order to get some of this. What do you say to people getting into debt? I?m assuming that?s what you need to do.


AM: Sure, there is what you call good debt and there?s bad debt. So we?ll play the liability asset game with people. We?ll say car, is a car good debt or bad debt? And they?ll say mmmm, they?re not quite sure. But car is bad debt. We?ll say real estate. Good debt or bad debt? They?ll say good debt because it?s kind of a given that we?re going to say that, right? We?ll say what else is a liability or an asset? We said how about a credit card and people will go bad debt. Not necessarily. A credit card can be good debt if you?re going out there investing in yourself, investing in real estate.


If you?re spending money on clothes or vacations then that can be a bad debt. Then we say spouse. Good debt or bad debt? We kind of joke with them. That depends on your spouse, right? And what happens is this. In real estate there?s what we call good debt. America is bad debt driven. But it?s a debt backed by an asset and the funniest thing about making money is there?s so many clich?s out there like the average person going it sounds too good to be true.


So did the idea of going out there and creating a social networking site where people could be friends and one day you could own and be worth $20 billion, right. That also sounds too good to be true. Now that?s very, very difficult because most of us are not to the level where we can go and program a giant social networking site. But the thing about real estate is it is duplicable, it?s leverageable and what that means is there are lenders out there who are asset based lenders. They will lend on the asset if what?s called the loan to value is low enough.


So if the value is $200,000 and if the loan is less than 65 percent of the $200,000 they?ll lend money to that even with people with bad credit. Sometimes they?ll have to put some money down but then we show you other sources of where to get that down payment money and that?s what a lot of our students who have bad credit or no money and then we shows who have money how to go out there and exponentially grow their money where they can earn, if they want to and they do exactly like we tell them, they can have the possibility to go and earn 40, 50, 60 sometimes even greater percentages on their money and that?s the greatest thing.


If you go to a deal with no money out of pocket the rate of return on your money is infinite. Then we show students who are out there, we have a lot of people out there who have 401k who now those have turned into like 201k right? They have, they?re earning 1 percent interest, 2 percent interest. We show them how to take that and turn it over into what?s called a self-directed IRA and how they can go and invest it in real estate and they have potential earnings 30, 40, 50 sometimes even beyond 60 or 70 percent on their money tax deferred with their own retirement accounts that they?re using by simply making some tweaks to their retirement accounts.


JT: Now I have a question, because when I was reading your book I was really impressed in how fast you did it and I know you said you went from $50,000 in debt to millionaire in a year but I was really impressed just reading your story about how your first flip didn?t take very long because what I assume, you talk about using your 401k money, I?m going well when do you get that back? Is it six months? A year? Houses aren?t selling very quickly now. That sort of thing. So how did you do it so fast?


AM: Well, one of the things is and this is a really interesting part that most people don?t realize, when we did the show Flip this House in Texas everyone was like it?s a booming market. Houses in Texas are cheap. What they didn?t realize is I started flipping houses back, I moved to Texas in ?01 and we were cranking out deals in ?01. ?02. Well we had what?s called a giant mold scare in Texas back then where houses that had molds in them would depreciate by 40 percent overnight.


So what we did is I?d buy these houses that depreciate like 40 percent overnight. I?d get them for another 10 to 20 cents on the dollar cheaper than what they were selling for. So I?m buying these houses literally at 30 and 40 cents on the dollar before they had mold on them of what the value was. We?d fix them up and we?d sell them below market value so the technique that I shared with you earlier, Jaime, about going and buying low and selling low, it kind of circumvents what we call the days on market problem.


So a lot of houses in a lot of areas in America are sitting there for maximum days on market, maybe 60, maybe 90 and worst case scenarios much more than 90 days. So what we do is say, ?Listen, people still want to buy houses. High income houses are actually moving right now but low income houses are not and middle income houses are moving because those people with high incomes who are coming down in income. People with low income who are coming up and middle income they?re going back and forth.? In other words, there means there is this highway of deals going on because people never stop buying houses.


If people stop buying houses in America, the entire American economy would collapse and the entire world economy would collapse. So what happens is there?s an illusion of people don?t buy houses so the way that you go out there and get your houses sold because you have the best looking house in the neighborhood and if you buy it cheap it enough the way we tell you to, then you can discount it and sell it for cheaper than all the other houses on the market and you create your own little hyper market which means your houses can sell much faster than all the houses around you and you can turn houses very quickly.


So people go and say well what about my retirement account? When do I get the money back? That money is saved to be your money so when you go out there and turn a house, let?s say you turn a house from the time you buy it, fix it and flip it in four months. That?s 120 days. Those profits can go right back into your retirement account tax deferred or you can even pay yourself a small fee out of it and the rest of the money go back tax deferred and be able to put money in your pocket right now.


JT: That?s really interesting information. That?s a really good point too of going everybody who buys a house feels like they?re getting a great deal because they got a good house at a lower price so that?s why they sell. Okay, excellent. So what did personal finance and dealing with all this stuff, I mean I know you?re talking about having people take out of their 401ks, how did personal finance help you build your wealth to a million dollars? Because, of course, if you spent a million dollars you wouldn?t be a millionaire even if you made it. So how has that affected you?


AM: Well I leverage other people?s money, right. So what happened was I didn?t have a 401k to use so this really speaks to a lot of the people out there who have no money. So I went out there and I use a combination what?s called hard money lenders who are willing to lend to people who don?t have the best credit in the world because they charge a higher interest rate. They might charge 4 points and 12 percent. People go, ?Armando, that?s way too much. I?d never pay that. I can go out and get a home loan for 4 percent today.? The answer is not if you have bad credit.


And here?s a better question ? would you go out there and pay 12 percent interest a point if you made $50,000 on a deal with no money out of your pocket? And the answer would be absolutely. The problem is most people don?t understand the value. They only understand the price of something and those are two different things. Poor people think of price. Wealthy people think of value and that?s the single distinction that wealthy people have over people who don?t have money and so I?m willing to go out there and I was willing to because my mentors taught me, Armando, they said you go out there and you pay 12 percent for a point and you can go make 30, 40 or $60,000 and I was willing to go do that because if I?m willing to go and make $30,000 all day long if I have to go pay a lender $6,000.


Most people block the idea of paying a hard money lender and for a lot of people they think well is that a loan shark? No it?s not a loan shark. These are people who are licensed and many of the states and there are hard money lenders in every state of the union and these people are licensed and then we also use something called private money lenders. These are people who are not institutionalized but they are people who want to be able to go out there and give money. It?s all done through lawyers and escrows to people who have great real estate bills because they need to get a great rate and return on their money.


JT: Excellent. Well it?s funny that you started with absolutely nothing and were able to build so much with nothing. I think that?s why it?s such an inspiring story. I?m sure you run into that all the time where people are like you started from nothing just like me and you became so huge. Of course we hear success stories like that and it sounds so easy because I read your book and it?s like well yeah of course you can do it, you?re a multi-millionaire, right? So what are some of the obstacles and challenges and failures that have happened to you in your business as you?ve grown it?


AM: Here?s the interesting thing is I want to let people know, listen, to go out there and to make it, it takes hard work. This is not get rich quick. This is a get rich smart. It?s get rich methodically. It?s get rich systematically and it takes a lot of hard work and effort. I think that?s the greatest thing that we tell our students. When we actually go out there and we do marketing, like we?ll do live events in cities, across the country. We?re in six different cities in America on any given week. We don?t go and say hey you can do this and it?s easy and voila. It?s going to take hard work. It?s going to take effort.


You?re going to have to go out there and push yourself. But we?re going to show you how to do it systematically, step by step as if we?re leading you by the hand on the path to success and haven?t you been working hard enough for long enough with no money? People go yeah that?s the case. Kick my own butt. I said, ?Fine now you?re just going to work hard at something where you know exactly what wealthy people do and how to do it in a step by step methodical approach.?


People go you know what, that doesn?t actually sound too good to be true, that sounds freaking realistic. That sounds like what I?ve been waiting for. So some of the challenges that I came with up that was a biggest single challenge was self doubt. That was the single biggest challenge. On top of all those layers was this belief that what if I don?t succeed? Was can I really do it? Do I have what it takes? That was the single biggest challenge of going and getting started and doing it.


But once you get started, here?s the interesting, I actually had this conversation yesterday with one of my students and I said, ?Here?s the thing.? I said, ?When I got that first check and I saw that first check, it was something like $34,000, I don?t remember the exact amount but my portion was like $34,000 and I saw a $34,000 check, right?? I knew, that was my first big check, I knew from that day on I would never be poor again.


Now, what are ups and downs? For sure, I remember it being about a year and a half and I had a business partner, this business partner was named Steven. This was before I would do any kind of business with anybody else. I had a business partner named Steven. Steven tried to go out there and take over my entire business. I don?t even remember if I wrote some of this in the book or not, but Steven went out there and tried to take over my entire business. Steven tried to go out there and take all of my contacts and the one thing I did right was I didn?t let him be on the bank accounts.


He tried to take everyone I worked with, all the places I was getting leads for great houses and I remember coming home at midnight and I was exhausted and I was scared and I was really thinking man what?s going to happen. Like I don?t want to lose my business, well he?s part of the business. I remember laying down in the house and by that time, six months after living in a garage I bought a 3,100 square foot house. I thought it was a mansion at that time. It was not huge but I was under the impression that it was a mansion.


And my son laid down, he was 3 years old, on the floor. He put his head right on my bicep and we looked up. We had a 21 foot high ceiling. Now he remembered living in a garage and he looks at me, 3? years old, and he goes, ?Daddy, I love my house.? My heart boom to the ground. I gave him a kiss. I gave my wife a kiss. I said, ?I?m going to work.? I went to work for the next three to four days and I buried my nose in it. My wife brought me peanut butter and jelly sandwiches to my little office and I revamped my entire business and what happened when I found, the lesson I learned was this ? so many times what we?re afraid of, those big problems and those big challenges that we come in life create the most success for us.


Most people just stop when they see a problem. Successful people, before they become successful, learn those lessons and learn you know what, with every problem that?s actually a massive opportunity. So now today literally when I get a problem, I know it sounds ridiculous and stupid and hairy fairy, when I get a problem I?m like yes! There?s a money making idea in here somewhere I just have to figure out what the lesson is.


That?s the biggest single challenge is overcoming the problems that you see. So what you do number one is you turn from problems to challenges and then once you start calling them challenges now you start saying where?s the opportunity in this given challenge. I?ll tell you what, life is a lot easier, it?s a lot simpler that way and you start making tremendous amounts of money when you start looking at your business problems as challenges and those challenges as opportunity.


JT: That?s great advice. It?s funny because yesterday we were just talking, my husband and I, about how having problems make you feel better. How humans need problems to solve in order to make them feel like they?re accomplishing things and working towards something. So that?s huge. I mean people without problems don?t have a better life. It?s the people who do surprisingly.


AM: They don?t grow. And here?s the funny thing too. So the people don?t grow, right. So here?s a funny thing. I always ask people this question. I said, is there something in your life that you look back and you?re like, at one time, you?re like how am I going to get past this? And you look back and like that kind of easy. This problem made me so much better, right? They?re huge problems, I just grew so much from them and without a little bit of pain there is no growth but the challenge is people try to avoid pain and the actuality of the situation is that those problems, they go out there and they help us grow, they make us better and then the best part of it is when you have those issues and those problems, you don?t get bored. Then it makes you stronger for the next opportunity. Because guess what, the big money doesn?t come until you have a couple problems.


JT: That?s a great quote. Excellent. So how do you?


AM: The other thing people go and say, ?More money, more problems.? And I?m like you?ve been listening to too many rappers, you know. That?s just dumb advice. More money, better problems. What I mean is like you go where am I going to buy my next house? Like am I going to buy a house on the beach or am I going to buy a house in the mountains? And those are good quality problems. Which charity am I going to go give to?


You say how can I help my family members better? Those are good problems. Those are high quality problems. Some people are going to say you know what, ?Money doesn?t buy you happiness? and I tell them, ?You don?t think so?? Go shopping with my wife, you?ll finally find your happiness, right?


JT: She?s happy, I?m sure!


AM: She?s very happy.


JT: That?s excellent. So how do you set your goals? So even starting way back when, have you always sort of had a process towards goals? Or how do you work with your clients with that too?


AM: I?ll tell you what?s really funny is and this is going to sound crazy and contradictory, I?m not a big goal setter. So I don?t, I try to write down my goals and like try to do what Emmitt Smith of the Dallas Cowboys, who I love and I respect, is career so much. He carries his goals in his back pocket. So I remember trying that and that kind of didn?t work for me and what I realize is the first thing I had to do was I had to get honest and figure out where I was.


So a goal is nothing more than a target but you can?t hit a target unless you know where you?re standing. Imagine trying to hit a target and not being able to judge the distance? Not being able to, it?s kind of like having vertigo, right? The world is spinning and you don?t know where you?re standing. So I tell people first thing you got to get honest. You got to figure out what you?re asking.


This is the one thing that we teach in the mentorship. How to get on from where they?re at. People are like oh it?s going to be so painful. It?s not painful. It?s a 20-minute process to get honest, know where you?re at so you know how to move forward. The second thing what I do is I tell people you can write down your goals if that works for you but here?s what I find works really well and we et a lot of students to do it too. I said, ?You daydream.? And what does that mean?


And again, try something that sounds like kind of weird but it?s not weird. I realized that my biggest weakness when I was a kid was I was a daydreamer. People talking to me and I?d be off daydreaming. I realize my biggest strength as an adult is that I?m a daydreamer. I daydream. So when I wake up in the mornings I go out there, I wake up, I kind of like to daydream. I daydream about my day, that I?m making money. I like to daydream about going out there and how much money we?re going to make, how many people we?re going to go help. I even daydream about some of the issues that I have but I don?t think about the challenges.


I just dream about what we?re going to do to go out there and help more people do bigger deals, help grow the economy and I?ll tell you what?s interesting is 13 years ago my wife and I were getting married and we thought about getting married at the Ritz Carlton down in Laguna Beach, down in Dana Point, California. Right by Dana Point and Laguna Beach. It?s right on the ocean, it?s amazing. We walked it and it was $10,000 to invite all these people. I was like how? I can?t afford it. How can I afford that? And I remember daydreaming about stuff and so the reason why you hear some of the noise behind me, I used to daydream and daydream.


The reason why you hear some of the noise behind me is because I?m standing in the parking lot of the Ritz Carlton in Dana Point, California right now and we have a suite overlooking the water. I?m going to tell people, daydreaming is good, especially first thing in the morning and last thing at night because it puts it deep in your subconscious mind and it helps you get over your what?s on the front of your brain for belief systems because what you believe is what we call reality. Means it seems real. The different between reality and actuality and actuality is how things really are.


So when you daydream about your wildest dreams and you do it every morning and you do it ever night, along with consistent action, a direct plan, having a mentor. I?m telling you, and you work hard at it, you can have whatever you want in this country if you?re told exactly how to do it. That?s the most important thing being told exactly what to do.


JT: So, okay and I coach entrepreneurs too. I hear this a lot and I liked this piece in your book, because you said, ?As an entrepreneur you need to learn to channel your free spirit which wants to run off and do whatever it pleases.? And I hear this a lot. So what do you do for your advice in channeling that because you are a daydreamer and you want all these things. How do you choose one specific path to go towards?


AM: Well, it kind of goes back to that hey Armando let?s talk about more money, more problems and I said no it?s more money, bigger problems. One of the biggest problems I have is literally which million dollar idea am I going to go with. So one of the biggest problems that I have is I?m very, very creative now. I wasn?t when I started off. I had no creativity because I didn?t understand possibilities. Everyone looks into this cast right now, the show, is creative.


Some know it. Some don?t know it but when you start seeing the possibilities in learning you start becoming very, very creative once you believe and you begin to start making money. Here?s a challenge. We create creativity. Entrepreneurs are free spirited. It?s how you hone that in. For some people it?s not drinking as much. For some people and this is for men, it?s having to calm down their sexual drive a little bit. What does that mean? Does it mean you stop liking the desire to have sex? It means that you, if you use that energy to come focus on your business and on your creativity, Napoleon Hill wrote that about in his book called Think and Grow Rich.


He wrote about going out there and using that sexual energy towards ideas that could go out there and make money. Then what happens is so you have to use that kind of free spirit honed down. So the way I hone it down is going back to when I first wake up and when I first go to bed. I?ll process anywhere from 15 to 45 minutes. I don?t stress about getting up and moving around and I?m not reactive to the day. I process what I?m going to do, what I want to do, what I need to do and to grow my business and then I get up and I follow through on those actions and guess what ? what I daydream in my day I may not do for three or four or five weeks later.


But I have it in my mind and it will come about. So I use my creative spirit during that time period rather than during the day all day long being like on Facebook or tweeting people or doing all these other things, which are great avenues for marketing, right. But I really go and I hone in during the work day I stay focused on work because early in the morning and at night that?s kind of like my creative time if you will.


JT: Excellent advice. So what?s one action that everyone can take this week to move them forward towards their goal of a million?


AM: You know, here?s an interesting thing and I tell people, I?m not delusional. I don?t think everybody out there wants to be a real estate investor. Even those who love doing it, one day you?ll have enough houses and you?ll have enough drywall and you?ll have enough roof and you?ll have enough paint cans, that?s not what you?re after. What you?re after is freedom. A freedom to be able to go and do the things that help other people, time for you to spend time with your children, get away from the bills. We?re all looking for some sort of freedom.


From that freedom, it ultimately brings us what we?re all looking for which is happiness. That?s one thing everyone has who is listening to this show right now is in common is they all ultimately want more money because people believe it?s going to bring them more happiness. I will tell you this, it tremendously helps tremendously. What I tell people is this. You may have a dream of being an actor or an actress, being a musician. We have a dream of going out there and running a giant charity.


I said but real estate is a great way to go and reach those dreams. It?s a duplicable, it?s understandable and it?s leverageable. So if you have a dream, say you know what, I want to go out there and I want to go produce movies. I will tell you, go do real estate, start making money and you can work towards your dream because it?s much easier to reach your dreams no matter what they are with money in your pocket. So those people who want to go do something, if they want to be taught, they can go to about how to do real estate in the year 2011.


They can go to one of my websites called Armandoteachme.com, Armandoteachme.com and I have my book, Flip and Grow Rich 2011 that will talk about how to do it in their market and their backyard and this year in this economy right now.


JT: Excellent advice. It?s funny how you say that real estate is a good set point, a good starting point for everybody which is funny. I?m a big real estate fan and I haven?t really actually gotten into it and now you?re starting to inspire me to go start looking around for real estate stuff.


AM: That?s my job. My job is to inspire people and then show them exactly how to go do it. I will tell you this, because I?m assuming, I?m thinking it?s a fair assumption, you are going out there and doing your shows and teaching people, right? We all have different dreams. I had a dream, believe it or not, that I one day wanted to be on TV and I want to go out there and be an executive producer of movies.


Then I also had a dream that I wanted to share and teach people. That?s when I started to hone in to make money in real estate and look to my mentors. After I did that, I got the TV show Flip this House and right now I?m in the beginning process which means we do pre-production in May, we do filming in June of a, it?s going to be a major motion film called Mission Part of which I?m the executive producer. So you?ll get dreams beyond real estate and that?s okay but having that additional money in your pocket helps you go out there and achieve and reach and maintain these other dreams. That?s the most amazing thing in the world.


JT: Thanks so much for coming on today, Armando. Everybody should check out his book, Flip and Grow Rich. It was a great read. Even somebody who was stopping by my house came and started reading through it and wanted to read it so it was a great read and everyone should check out Armandoteachme.com. Thank you so much, Armando, for coming on today.


AM: Thank you for having me, Jaime.


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