Bruce Norris is joined this week by Tony Alvarez. Tony is a familiar face and has been a friend since he and Bruce first met in 2003. He mostly buys properties to hold with an occasional flip in the mix. He now does this in a couple different states.
Episode Highlights
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- What was the crucial moment that led to Bruce and Tony’s meeting and him becoming an REO mentor?
- What is the most important thing Tony looks for in a relationship, whether business or personal?
- When did Tony choose to start selling properties, and what type of market did he sell in?
- What was some of the top advice Bruce gave Tony to help him with his business?
- Did Tony’s journey toward becoming an investor start out good?
- What was his experience like the one time he worked in Lancaster?
Episode Notes
Tony had taken a break after the last Millionaire Maker seminar in 2015, so it was good to be back. What was interesting about Bruce and Tony’s first meeting is he had been interested in hearing what he had to say for a long time and decided to check out his seminar at the Apartment Owners Association. There was a crucial moment where someone in the audience asked Bruce about his topics, including the market and single-families. He asked him how that would affect him as an apartment owner. Bruce stepped back a second and told the guy he was really not sure. The whole place laughed a little because it took off the pressure. He could have danced around it, but Bruce stood there and told him the truth. This impressed Tony, and this was how their friendship began. He went to the back to wait for him because he knew in that moment the kind of person Bruce was.
There was a sequence of events that happened afterwards that may not have happened if they had not met. Tony would have never been introduced to the industry. It’s like peeling an onion back to how it started, and you think about what would not have happened going forward. Looping means you pretend to know something you do not, and there was a time he was tested. He was trying to get into Corona Industrial Electric to sell them their parts, and they were a pretty established business. He did not know that the owner was the mayor of Corona and an Auschwitz survivor. When Bruce asked to quote their work, she rolled a big set of plans across the table. She told him to take a look at them and give him a quote in the switchgear. He thought you needed an engineering degree to know this and told her there was no way she could trust the number he came up with. She told Bruce she was glad he said this and could work with him. Bruce never forgot this lesson.
Bruce spoke in front of the Corona real estate group 2 days after she passed away, and her son was there. Bruce was able to tell him this story about how his mom affected his entire life to never pretend he knew something he did not. Someone else had asked Tony what was most important for him in creating a friendship, whether business or personal. They thought it would be loyalty, but he said the number one thing was honesty. He wants to get to the bottom line as fast as he can; and if someone is willing to do this then you know there is nothing you cannot develop with that person. You do not want to hear someone and question if you should divide it by 2 since it is usually an exaggeration or something is withheld. This drives Bruce crazy and has long-range implications where you put somebody in a certain category that is hard to escape.
Tony said the person who originally asked him thought respect was the most important thing in a relationship, but this was not even Tony’s top 2. His second one was actually loyalty, and there was no third. If you go beyond these two, you are in trouble. Most of the people he met, business or otherwise, who have sound themselves in trouble over their life has been as a result of their inability to be honest with themselves and other people in analyzing what they are doing, about to do, or with whom they get involved. It could be a real dilemma for someone because that extends to you convincing yourself you can get involved with people who are not of good character. People think it will not happen to them or they can solve the problem or overlook it. Most problems stem from this nonsense.
Bruce said he does not like when it is almost done on his behalf. They endear themselves with somebody and end up crossing a line. Bruce just says he knows what that person is like and it will be his turn someday. There cannot be any loyalty here. Loyalty is when someone is really watching out for you and tells you the truth even when you do not want to hear it. Loyalty is not somebody carrying out your orders regardless of whether they are worth carrying out or not. This is the kind of loyalty of which Tony wants no part.
Bruce said we have not had many chances for applications to jobs. A long time ago when The Norris Group hired Vickie, there was a question on the application regarding this. If, hypothetically, he asked someone to do something on his behalf that was not honest, what would you do? Everyone else but Vickie answered that they would do it.
When Bruce and Tony first got together, Tony had a detailed list of properties that impressed Bruce. He knew where every cent was going, what he paid, and the rent. Bruce said this was the only time in his life he had anything to do with the area of Lancaster, and it was in Rosamond. If they had that discussion any other time, he would not have had a list of reasons why you should not do what you are about to do. Bruce is holding off for the very reason someone else may be about to sell. It was fun looking at Tony’s list of properties and know with certainty that he would not sell just yet.
Tony said he was actually somewhat disappointed because he wanted to bail out faster than anyone else. He felt like somebody in a boat who was ready to sink. This can happen when you don’t really understand your market or the bigger picture, like when to get in or out of the market. He dealt with his inventory, and that was it. When he started his journey, he had come off of a really bad situation. He started as broke, and he has now create a multi-million dollar net worth. He could literally be done even if he sold everything early. People never believe him when he tells them he had no clue how much money he amassed in property values. He was paying attention every day to what he did, even if he was not watching the market. He got better and better at what he did, and his goal was to get to $1 million in profits by holding onto only 10 properties he would pay off and would be worth $100,000.
By focusing on what he did and getting better, he learned to love what he did. When he put his head up, he had $7.2 million in equity. He did the numbers over and over again just to make sure. He was desperate to get out because he would have dreams about earthquakes happening and destroy his homes. He was acting out of fear, and Bruce taught him not to do this and instead hang on. Bruce gave him almost ten words of advice: “You just need to stay a little bit longer.” He went home that day reluctantly because he really did not want to do it. However, he changed his whole plan and decided to wait. Bruce called Tony three years later and told him to dump it.
Bruce remembered one email from Tony asking what he thought the peak month would be. Bruce told Tony he owns so much that it is probably affected by what he does. Tony is 61 now, and over the years he has become convinced that everyone has a message for us that we will catch if we are paying attention. Bruce had a great message for Tony, and this was the start of a great friendship. Bruce introduced Tony to the market as a speaker, and of all the times he spoke in front of an audience he never felt he did as good a job as the very first time that Bruce introduced Tony to a wide audience. The first time he spoke he was grateful just to be on the stage and teach people everything he had learned. Tony remembered how all the way up until the last minute he was petrified and thought Bruce was crazy. However, before he went up on stage Bruce asked him, “Are you going to lie to anybody out here tonight?” This shook it right out of him and he asked Bruce why he said this. Bruce was telling him to just go out there and tell his story about what he did. Tony got up on stage, and the fears went away.
Tony learned since this time how much we forget to be humble and grateful for whatever comes our way. This is regardless of whether it involves real estate profits or a chance to speak to a group of people that really wants to hear what you have to say. Bruce said this was a really cool day for him to witness because there were skilled people at the event, and Tony was the only one people lines up to hug. Tony said in retrospect, when he looks at this he realized he was as much in the audience as they were. He heard every word he said as if he was an attendee. This made him feel that he did not have to think about what he said because it came from his heart. He recounted his own life experiences.
When you end up broke and it happens to you more than once, you think you are a career moron. However, if not for Bruce Tony would have ended up selling his things prematurely and try to figure out what to do with his money. If not, he would have crashed and burned because the market would have caught him off-guard. When you realize this, you realize how interdependent we are. We all seek independence, while some people choose to be dependent. In the end, you realize you are interdependent and we all rely on each other. Bruce likes to do things Tony hates to do, like always reading material on the market. Tony sat at his event on timing, and he was astounded and never felt that good. He realized he needed to get out more when he realized he loved listening to information and being around people.
We all need each other to a certain extent. This was why when Tony discovered Bruce and his loan programs, he gave the Norris Group his business as long as he possibly could. Nothing else mattered to him, he just wanted to support those who supported him. How do you pay back somebody who makes you $10 million with 10 words? Bruce said he does receive back. Bruce knew his event would sell out because people have supported his research. He said when you are standing in front of an audience of extremely wealthy people is humbling. Bruce can think back to when he was fired five times in a row and sitting in his car eating lunch and looking at Help Wanted ads because he knew he had a shelf life between 3-6 months. This is a rough way to look at yourself.
Bruce and Tony next went on to talk about Lancaster. Bruce asked Tony about when he chose to sell what the type of market was in which to sell. Tony said it was crazy, and he basically sold because Bruce told him now was the time. Bruce was right; Tony had built two houses at the end of the market because of the lots he had obtained at a good price. One of them sold for $410,000, and this was an 1800 square-foot, 1-story house. It contained 4 bedrooms and 2 bathrooms, but was nothing spectacular. When he listed the other house, it took him an act of God to get rid of it for $396,000. The market had already started to change, and there were no takers.
In one of the last conversations Tony and Bruce had, he told Tony he just start getting rid of his properties. At first he tried to argue with Bruce about it and ask why when he was seeing prices going up $25 grand a week. He would sell houses to people who would then turn around and sell them a few months later. Some made money, but a lot of them crashed and burned. The question Bruce asked Tony that really woke him up was, “Do you want to sell your stuff to a euphoric market when everybody wants it, or do you want to sell it when nobody wants it?” From this question, Bruce took Tony out of his nonsense and took him back to where he was before he went bankrupt the first time. After this he immediately started selling, so it was like a slap across the face.
This took Bruce back to his stock experience where he turned $250 into $850 and down to $100 in under 2 months. He did not sell it until it was $100 since you could not possibly sell it at $850. There was one time he made $100 grand in a day with his portfolio. You get used to this and pat yourself on the back saying, “Gosh, I’m really good at this.” Then you find out in places like Lancaster it had its day, but when its day was over it changed. It was like a nuclear dirty bomb went off and nobody wanted to touch the place.
When Tony became successful, he almost felt guilty living in a nice place in Oregon. However, Bruce said he felt the same way about the research he did for himself because it took him away from guessing and listening to other people. In 1989 when he started a big project after failing, it was completely due to momentum at the time. It had nothing to do with the chart, but rather to do with feelings. Bruce learned his lesson that this could be very bad. Every real estate agent in the market who Tony respected were asking Tony for advice. He knew an investor who had over 300 houses, and he asked Tony to come into his office. Tony had taught him how to do section 8. The guy asked Tony what he thought, and he told him he was dumping everything. The guy ended up calling Tony an idiot. His wife came into the room and told him to listen to Tony since he in turn listens to other people.
Tune in next week as Bruce continues his discussion with Tony Alvarez on the Norris Group real estate radio show.
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