Tuesday, March 21, 2006

Peter Fortunato

I went to the local REIA meeting last night to hear Peter Fortunato speak. Pete has been doing real estate since 1970 when he was 18 years old. By the time he was 28 he was "retired" from his day-to-day job and spent the rest of the time just investing in real estate. One of the more interesting things he said was that he has not used a bank since about 1977; all of his deals are funded by either the seller, or money partners, usually the former.

Here are some of the important tidbits from his talk:

  • You don't find deals - you create them

  • You create deals by finding out what the seller really wants

  • In a capitalistic society, no one will make a deal unless the thing they receive is better than the thing they give up...you must find a way to do this

  • Do NOT use partnerships, you are responsible for the sins of your partner! It is best to use Joint Ventures and Trusts.

  • Options are a powerful tool for controlling and investing in real estate, especially with your IRA.

  • When creating an option on a piece of property, never have a statement allowing the seller to buy back the option in the future; this can be considered a disguised loan and can get you into trouble. It doesn't mean you can't let them buy it back in the future, but that should not be part of the option.

He is a great speaker; he is entertaining and tells it like it is. His website lists a few speaking engagements, although most are in Florida where he lives.

Here is a book that Peter recommended everyone to read:
Building Wealth One House at a Time : Making it Big on Little DealsBuilding Wealth One House at a Time.

I have read this book and agree whole-heartedly. It is very practical and straight-forward. If you do exactly as Schaub says, you will guarantee to retire wealthy.

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