SENSI (SEAN) GILLILAND
Sensi (Sean) Gilliland started out as one of the highest ranked martial artists in the United States to becoming one of the most recognized real estate experts in the United States.
BB:Why don’t you share with us about your background and share how you got started?
SG: I have been in marital art basically my whole life. At a very young age of 13, I was already teaching adult classes. At the age of 16, I was teaching the L. A. sheriff’s hand to hand combat and weapon disarmament. I have competed in 29 countries and made the United States Olympic team for ’92. However, they got cut out of the event. Nonetheless, I focused a lot of energy towards my training and I just have an absolute passion for it. I am still involved with martial arts with 5 schools in Southern California in operation.
I was really after income streams. This was back in 1993, 1994. I was searching around for coin op car washes and what ended up happening is that; I didn’t know anything about real estate. I understood the business model of coin op car washes, 24/7 business, cash business, very low maintenance, and it was appealing to me.
When it came to learning about the real estate with a structure that actually sits, do I rent do I lease, do I build a suit, and do I buy. How does this work? I found myself in a realm of unfamiliarity that I needed to learn everything I could about real estate. Here’s what I ended up learning, Real estate controls all businesses! So with that I said wait a minute here if real estate controls all businesses and I love control. Let me know more about Real Estate so back in 1994 I started taking a lot of classes and back then they were called boot camp bunk but I did plunk down about $32,000 and bought into some workshops learning everything I could about real estate.
In 1995 was a huge year for me and what I mean about that I got engaged, I got married, and I moved in with my wife, we had a baby, we bought our first home. We did cash out re-fi on our first home rehabbed the property and did another re-fi on our house and towards the end of the year bought my very first fix and flip over in Ft. Meyers, Florida while living in Southern California. It kind of freaked out my new wife out it’s just kind of how I role. With that people always ask me why did you go to Florida? Basically for affordability couldn’t afford to buy something here in California. California is a completely different state than all the other states compared to housing prices. So, I went to Florida put a team together understood the concept of buy low, fix it up, force value, sell high and found my very first property which was a probate $42,000 I had the 10% put down on that property had a little bit in reserve for mortgage payments then I ran into a huge issue – I didn’t have the money for the rehab – so I read a book a long time ago saying if you found a good deal money would come to it and it sure did…it came right out of my credit cards. So I extracted the money out of the credit cards is just like a hard money lender to me so I rotated the balance every month and never had to pay money on that rehab expense and in 9 months to my surprise flipped my property. I made a little over $9000 in profits – now there was a lot of worry and frustration and some fear playing in those 9 months because remember in 1995 we didn’t have the internet like we have today and I didn’t have the money to check on the property but every once in a while I get a Polaroid showing me some progress. But, that $9000 in a 9 month period showed me all I had to do was eliminate the fear and take some action buy the property, rely on a team, delegate jobs and I have passively earned over $1000 a month. The one flip I treated like I treat Pringles Potato Chips – one pop and you can’t stop! So, I had to go back over there a pick up some more properties. So, today here I am – 21 years later still flipping properties and buying and holding properties.”
BB:How and why did you start the invest club Black Belt Investors?
SG: In 1995 I am in Florida flipping houses because it was affordable to me over there and taking that little snowball of money I started to build that up and I started taking the little snowball of money building that up and started rolling that snowball from Florida, Alabama, Texas, New Mexico, Arizona and eventually hit the golden shores of California being able to flip properties here. It seems to me that people wait to see if you’re going to fail or not. And, I wasn’t failing and people were watching and wondering what the heck is he doing why is he able to do what he is doing, live the life style he is living and to be able to earn this extra income especially using other people’s money? Well, I had a handful of people willing to get involved with me during the 90’s by either loaning money to me or learning from me, or buy a rental from me or get involved with by a joint venture ship and with that following in the year 2000 I actually opened up my company Black Belt Investors where we focus on education, consulting and investments. In 2002 with that following I thought a good way to reach out to people and help people start living the dreams that they desire I established my very first real estate club in the city of Downey, California and today I operate 3 chapters in Southern California.
BB: What is the common obstacle from people achieving their outcome that you find?
SG: Well you know what, I mostly deal with a lot of people and I hear a lot of things like I don’t have time and I don’t have money or I have to talk to my spouse or they come up with a lot of excuses and that’s what they are excuses. What it really boils down to is fear. Fear of the unknown, fear of am I gonna lose a dollar, fear of what if I mess up, fear of success. I have many people I work with that have a fear of success. And, I think fear is the biggest obstacle for most people. Now, to be able to get over that fear you need to put faith in front of fear. You have to have some faith and to be able to get comfortable in that faith I think you’re going to get into the real estate world and to get comfortable to where you can pull the trigger you need to educate yourself. It always boils down to education, now, education is not everything because there is a lot of people, for instance, that comes to my real estate clubs that are very, very knowledgeable in real estate. But, knowledge is just information. The difference between them and someone like us is that we have wisdom. Because we take that knowledge and put it into action and create that wisdom. So, if I’m consulting with someone that has a fear of moving forward whenever that niche their interested in they really need to hone their skills in that niche. You don’t need to know everything maybe you’re going to be a landlord you don’t need to know everything about land lording but you should have a solid foundation so that you can understand the components that go along with land lording so you can make an educated decision so I think it boils down to getting over that fear is to get that education, get some counsel with that education and start taking some action.
BB: How do your help your client analyze their path whether being a landlord or doing a flip?
SG: It’s pretty easy a lot of people come to me and say I want to be wealthy; I want to be financially secure. I totally understand we all do – right? But, you know they come to me saying they want to own rental properties because that’s where they see the wealth building aspect comes into play. But, I find that a lot of people don’t really need wealth building education or knowledge but what they really need is a paycheck and so know you real estate is divided right down the middle. We know what we want but we got to focus on what we need and a lot of people need paychecks and there are some people that don’t need the extra paychecks they actually want to build the wealth for their financial future. However, either way whether you’re buying, fixing or flipping properties you have to analyze the deal. And, if you’re going to buy and hold properties you also need have to analyze the deal. Now, I tell everybody we always make our money on the purchase not on the sale. I am a wholesaler at heart and that’s where Black Belt Investors is founded. And, a lot of people think wholesaling is all about assigning contracts and that is incorrect if you are someone who wants to flip properties without the use of cash or credit and assign contracts over to another investor than yes that is a form of wholesaling. If you’re a rehabber that buys, fix and flips because that is your value add of retailing a property then you are also buying at a wholesale level, you must buy with an equity position. And, if you’re a landlord like myself, well, I like to make sure that I make money on my purchase so I am going to buy rental properties on the wholesale level. Either way what is important is in evaluating the deal is not just the numbers of what are my returns and that is what I think a lot of people go wrong. They just look at the numbers of returns, okay, if I put x amount of dollars in this property and I do this type of maintenance and I have holding costs and possible an HOA and I’ve got insurance, utilities and repairs my return will be x% or x amount of dollars. That’s an important aspect obviously to be able to analyze a property but that’s not the only thing you want to analyze see, we always need to know how to get out of property before we get into a property. And, even though a property seems to perform well on paper, I always ask what is the local economy doing, where are you buying, is this a economy in a revitalization stage is it stagnant, is it regressing, is it progressing, where are we at with this because you can buy something that is very appealing in regards to the numbers but, are you really going to be able to collect rents. If you’re going to buy fix and flip are you going to be able to retail it out because maybe you are in the wrong neighborhood you may be in the area that is predominant landlords and renters which are looking for either rental property or property at a wholesale rate? But they’re not looking for something at retail. So, I find a lot of people get stuck and lose money because they are focused in the wrong areas. They are only running the numbers on the subject property but they’re not running numbers on the local or county’s economy. And, so with that it is very important that when an investor comes to us we take a look at everything that surrounds that subject property to make sure that were able to make our money before we purchase and to be able to exit out of the property whether it’s going to be a fix and flip in a good amount of time. Or, if you’re going to be a landlord and if you need to liquidate – can you liquidate? That is the important question to ask.
BB: I know a lot of people that lost a lot of money in the recession their credit score is below 600 and they
SG: You’re definitely right there is a lot of people that just got kicked between the legs during that recession. It either ruined them or basically near ruined them. But, we are now were moving forward and people are starting to get back on their feet and I feel a lot of people returning back to the real estate gammon. And, with that if someone is lacking funds I would never tell anyone to take all of their money and invest it. You definitely need to have savings behind you and something liquid to be able survive on in case of an emergency comes about or another recession. But, if someone’s looking to get in real estate without having to use a lot of money or no money at all there are a couple of ways to go about this. Number one – you can learn how to wholesale properties if we had a pie chart the majority of investors out there are landlords the second biggest slice of the pie arerehabbers that buy fix and flip and then all the other slices is everything else. So as a wholesaler like myself I can now start supplying those big slices of pie. I can supply those wholesale deals to a landlord, and I can supply a wholesale deal to a rehabber. Because the land lord and rehabber have their value add was either for the long term of supplying a nice house for a tenant or the value add for a rehabber is to take a dirty dog house an turn it into a doll house their value add is not extracting properties out of the market. And, so the wholesaler’s job is to extract those properties that are good deals and supply the rehabbers, and supply the land lords. So if someone doesn’t have very much money than they can learn how to extract those properties out of the market put them under contract and sell the contract or rights over to another investor. Now, depending what state you are in, depending what part of the state and on average here in California right now in today’s markets it’s about a $15,000 profit for that assignment of contracts.
That way they can do the business, flipping properties without it having to take title, without having them use their credit, without having to use their money, without having to go through a hard money lender, and, basically their now doing real estate without the risk. The other thing that you may want to look at is possibly doing joint venture-ships. We do a lot of joint venture-ships for clients, we put them together, we also use them. And, with that for instance we got a project simple numbers $100,000 and someone says I don’t have a $100,000 to buy, fix and flip it. But, I have $25,000 so if we can group 4 people together and to kick $25,000 a piece that now cuts out the hard money lender we can buy that all cash which will give you a better rate of return and you only invested 25% versus the whole 100% which is a little bit more easier on your pocketbook. So joint venture-ships is another great way. And, then of course we all know OPM we are not talking about the drug but Other People’s Money. You know we can definitely start capping in to other sources where that person gains that knowledge gets a little bit practice under their belt and then they start soliciting investors that want a better return on on their monies and that way they can start lending money as OPM to that investor and they can start rehabbing a property and they can be a 50/50 partner. We do that all of the time at Black Belt Investors. So there is three solid ways that you can do it with very little money if no money at all.
BB: What is the best way our audience can learn about your program?
SG: Well Black Belt Investors we offer 9 different educational courses anywhere from wholesaling to rehabbing to land lording to business operations, entrepreneurship, we got a good selection there and then the other part of it is consulting coaching side you know you always want follow up, you need a coach – a solid coach in your corner just like how Magic Johnson, Kobe Bryant, Ty Cobbs and all of these great players, they all have coach why because you need someone to be able instruct you to make sure you are following the correct path and so we have the available. And, then we have the investment opportunities people that want to get involved in buying real estate whether they are flipping or they want to buy and hold and we have that available too.
So the best way to find out more about us is simply go toBlackBeltInvestors.com. And, then for our properties we haveRemoteRehabs.com or they can give us a call here at the office at 951-280-900.
Thank you Sensi it was so nice to talk to you and learn so much about real estate investing.