Here is the first chapter of my new book; The Code Of An REO Warrior. Enjoy!

It’s no secret that real estate has the lowest barrier to entry of any of the professional white collar jobs. Here in California all you have to do is pay the license fees, fill out the application, take some online classes, pass a test and presto, a brand new real estate agent is minted. The public perception of a real estate agent is a life of easy riches with little or no work. When you combine these two things what you end up with is a lot of real estate agents. A lot of agents all fighting for leads, clients and transactions. In California we have over 532,000 licensed real estate agents. That’s one real estate agent for every fifty adults. A full two percent of the working population is licensed.
This low barrier means an almost inexhaustible supply of new recruits for the real estate brokers. The traditional business model of real estate is what I like to call “Churn em and Burn em”. It’s not good for agents, clients or brokers but it’s the way things are done simply because this is the way it’s always been done. Here is how it works.

THE TRADITIONAL BUSINESS MODEL OF REAL ESTATE IS
“CHURN EM AND BURN EM”

HotShot Realty is hiring this month. What you should notice is that HotShot Realty is hiring every month no matter what the housing market conditions are like. They hire a few agents every month, give them little or no training and then let them loose. They tell these agents to contact everyone they’ve ever met in their life, commonly referred to as their sphere of influence, and ask them point blank if they know of anyone who may be interested in buying or selling a house. This puts their friends in a bit of a bind. Of course the friends of this newly minted agent want to see their amigo be successful. They just don’t want to entrust the single biggest financial transaction they will ever make in their lives to someone who just recently skipped over that famously low barrier to entry. Occasionally a few of these newly recruited agents will convince a few members of their sphere of influence to send them their business. Pretty soon the new agents run out of friends and then they get to experience the absolute soul crushing rejection of cold calling and door knocking. It’s not a pretty time in any real estate agents career.

THE BROKERS CHURN AND BURN THE AGENTS
AND THEN ENCOURAGE THE AGENTS TO
CHURN AND BURN THEIR FRIENDS AND FAMILIES

The results are predictable. After a few months of little or no income, all retirement money is sucked out of the newbie agent’s savings for marketing costs, desk fees, technology fees, MLS fees and the simple cost of being alive in the twenty first century. The vast majority of agents crash and burn and are forced out of real estate within the first year. Most of the agents who survive the first year go down in flames by year five. The brokers know these statistics. That’s why they’re always hiring. It doesn’t cost them anything to hire a new agent. That’s what those various fees are for; to cover the broker’s costs of hiring. The brokers churn and burn the agents and then encourage the agents to churn and burn their friends and families.
A slim minority of new agents do survive this system and they become the agents that handle the vast majority of real estate transactions. The famous Pareto Principle should tell us that eighty percent of the real estate transactions are handled by only twenty percent of the agents but this is not the case. Over ninety five percent of all real estate transactions are handled by less than five percent of all agents. The average real estate agent does zero to two transactions per year. This means that any agent who closes three deals a year or more is in the top percentile of agents. That’s great for your ego if you do three deals as a new agent but good luck eating that shiny Magnesium Commodore’s Club Award you get for real estate excellence from your broker.
Are you ready for a career in real estate after hearing all that? Good. I knew what the odds were when I got into real estate. I believe that’s one of the reasons for my success. The agents who make it are the agents who come into this arena with no illusions. If you want to get rich quick in real estate with no money down and no work required you should put this book down and go buy lottery tickets. There are plenty of books that promise easy real estate riches. I promise genuine real estate riches. My secrets may be simple but they’re never easy.

YOU CAN HAVE EVERYTHING YOU WANT IN LIFE.
YOU JUST HAVE TO BE WILLING TO
PAY THE PRICE UPFRONT FOR SUCCESS

You can have everything you want in life. You just have to be willing to pay the price upfront for success. The price is not as high as you think. This book will tell you what you need to know to succeed as an REO agent. While this book will give you some specific actions you need to take, the most important thing you should take from this book is the mindset that is required to succeed as an REO agent. Your attitude towards your work, asset managers, tenants, former owners, your team and yourself is the crucial component that only you can change.
Systems are great. I love systems. I’ve bought and used real estate systems from others that greatly impacted my success. I’ve created my own systems. The dirty little secret of all those systems is that without the right mindset, the right code, you will be ineffective in implementing those systems. This is why this book is the first and most important part of the BPO’s 4 REO’s system I sell. You can have success in this field without my systems but you won’t have any success without the right mental attitude.
Blood Sports are won by the warrior who is prepared and ready to do whatever is needed to win. Warriors operate with a code. A code that guides and informs them as they navigate their way through the day to day ordeals every one faces while striving to win. Real estate is no different.

THE REO FIELD IS A VERY UNFORGIVING ONE

Brian Tracy teaches that “Success leaves tracks.” What he means is if you want to obtain an outcome then study what a successful person in that field did. If you find out what they did to achieve success then do exactly what they did, the outcome is all but a foregone conclusion. This is how I learned the secrets that I’m revealing in this book. I took a look at the agents that were getting the REO listings and I found out what they did to get them. I also learned from and benefited from their mistakes. Learning from the mistakes of others is always the best route. You get the benefit of their errors without the stain on your own reputation.
The REO field is a very unforgiving one. You need to know what the pitfalls are so you can avoid them. When you are just starting out as an REO agent it only takes one or two mistakes to kill your career. Asset managers are like real estate brokers, they also have an almost inexhaustible supply of new real estate agents to give business to. If you don’t give the asset managers the service they require they won’t complain more than once or twice to you. They will simply find another agent to handle their work. They’ll complain about you to the agent they reassign all your listings to. (This is one of the best ways to learn from other agents mistakes.)
Asset managers need agents who exhibit good judgment, possess a sense of urgency, know how to value homes, have a sound marketing ability, and a sense of their fiduciary duties.
Asset managers don’t have the time to constantly hire and train new agents. They want to find one or two good agents in each local area and use those dependable agents for all their transactions. This is why a very slim minority of agents have the bulk of all the REO listings. Those successful REO agents have proven themselves capable and dependable to the asset managers. This book will go a long way to ensure that you are the type of agent that asset managers depend on.

SUCCESS IS YOURS
ALL YOU HAVE TO DO IS TAKE IT

The bright side of this is the knowledge that most people are not willing to do what is needed to succeed. Jerry Rice of football’s Forty Niner’s once said “Today I will do what others won’t so tomorrow I can accomplish what others can’t.” The average agent won’t do the things that I suggest in this book. They don’t want to do the work upfront for success tomorrow. You bought this book so you’ve taken the crucial first step towards success as an REO agent. If you consistently do what I recommend with the heart of a warrior then you too will be successful as an REO agent. I wish you luck. Success is yours. All you have to do is take it.