Title: Preparing for Real Estate Career in Prison (05/06/2021)
- David built a successful career in real estate through his rigorous work ethic and strong morals. The son of a military man, David learned early on the value of going the extra mile to succeed in life. He excelled in academics, which prepared him for a financially rewarding career in business. Later, he transitioned to real estate investments. To date, David has overseen the acquisition of more than 2,000 properties; he estimates that he acquires between 70 and 90 properties every year.
- Students will learn how David’s strict adherence to a strong work ethic and his faith- and family-oriented values led him to succeed in life. Participants will understand how David’s robust communication, critical thinking, and math skills helped him to build a successful career. In addition, the lesson outlines several business-related concepts and offers advice on strengthening leadership and relationship-building skills.
- Watch the video that accompanies the lesson
- Write a definition of each word highlighted in bold and written in italics
- Use ten of the vocabulary words in a sentence
- Respond to a minimum of three open-ended questions by following instructions at the end of the lesson.
- Participants will increase their vocabulary by at least ten words.
- Participants will improve writing skills and their ability to contemplate how their responses to open-ended questions relate to their prospects for success upon release.
- Participants will add to their journal, demonstrating a self-directed, self-improvement pathway to prepare for success upon release.
Learning Content and Course Outcome:
Our team at Prison Professors thanks David for imparting several life lessons. Anyone can grow by listening to the video lesson that accompanies this course. As David reflects on his path to becoming a successful real estate investor, we get inspired and learn steps we can take. His father, a dentist that once served in the Armed Forces, instilled in David the value of discipline, resilience, and setting goals. As a result of his father’s teaching, David adhered to strong moral principles and maintained a voracious work ethic throughout his life. These values have led David to excel academically and boast a successful career in business. Later, he prospered by investing in real estate, acquiring more than 2,000 properties over the duration of his career.
David attributes much of his success to the goal-oriented attitude he developed at a very young age. At 14 years old, David started writing down his goals and reciting them out loud every morning and before bed. He also learned to hold himself accountable to a set of principles that he dubs the six “Fs:”
- Finance, and
David prioritized those fundamental principles that characterized his life in the order listed and consistently considered them when making decisions.
David also developed an entrepreneurial spirit from a young age. He entered the workforce as an adolescent, working as a janitor at a golf course and engaging in his own ventures to supplement his income. While playing as a baseball umpire in high school, he sold gloves to spectators in the winter. His early employment experiences led David to enhance his communication and critical thinking skills.
While at the golf course, David learned the importance of building rapport by remembering other people’s names, a habit he continues today. By recalling names, David demonstrates courteousness and fosters trust in his professional network.
David learned many of his success principles from his father. He recalls his father as a martinet who demanded that both David and his older brother earn straight “As” in school. His older brother received a “B” once, prompting his father to chastise him with a spanking and force David to observe.
David arduously studied to make perfect grades to meet his father’s high standards, even though he felt less intelligent than his brother. Similarly, he demonstrated the same tenacity as a student-athlete, eventually going to college on a tennis scholarship.
David continued excelling academically after coming of age, and he graduated as valedictorian in his cohort at the University of Indianapolis. Later, he completed advanced studies that would lead to a graduate degree, with a Master of Business Administration.
As I served a 45-year sentence, I looked for leaders to understand how I could plan my life’s course upon my release. Prison serves as a pathway to failure for people that do not prepare. Sadly, many children of people that spent time behind bars also suffer. Formerly incarcerated people too often face a perpetuating cycle of poverty, social stigma, and repeated imprisonment after their release. Leaders like David give examples of feasible ways to reenter society and initiate a successful career through hard work and commitment.
David benefited from his father’s presence as a strong role model. Although many incarcerated people lacked similar mentors as youths, leaders like David offer guidance on how a productive mindset could lead individuals to transform their lives for the better. Even behind bars, people could adopt forward-thinking exercises, such as David’s practice of writing down and reciting his goals twice a day.
Our coursework at Prison Professors is geared toward empowering incarcerated individuals to become the “CEOs of their own lives.” Consider our tenant of defining success – we encourage our students to identify their goals and make incremental progress towards their purpose. Adopting David’s routine of writing down and reciting goals or his value system (the “six Fs”) can help people reinforce their commitments towards self-improvement.
Incarcerated parents can also learn valuable lessons from David’s childhood. By instilling a robust value system and work ethic in his son, David’s father paved the way for his son’s later success. Similarly, people in prison and jail can strive to serve as strong role models for their children upon their release. Sound principles that parents should strive for include leadership by example, commitment to their family, and a positive outlook on their future.
Mass incarceration is one of the greatest social injustices in our nation today. Unfortunately, a negative mindset of helplessness and despair often prevails amongst the incarcerated. Many people that serve time in jails or prisons return to society with an erroneous belief that their future will inevitably involve mediocre career choices or social connections. Leaders like David offer insight into how adopting a different mentality can transform lives.
- Why do you think writing down goals is important?
- How does this practice reinforce what you intend to accomplish?
- How can writing down goals and creating a value system like David improve your current situation?
- How can these practices help you upon your release?
- Why is earning trust through good manners, like remembering others’ names, essential for you to function in society?
- How can following a self-directed value system, like David’s six Fs, help you in prison and as your transition back into the community?
- How do you think David’s strong work ethic led him to balance multiple jobs, participation in sports, and school assignments as he grew up?
Career Success and Business Model
After graduating with his master’s degree, David worked for several years as a profit recovery analyst for many of the nation’s largest businesses. The career proved remunerative, but David felt dissatisfied with the long hours away from his family. Because of his stalwart commitment to being close to his loved ones, David began developing his expertise in real estate, wanting to transition to a less time-consuming career.
David began investing around 2006, right before the subprime mortgage crisis that led the nation into a severe recession. Against his father’s advice, David resigned from his high-six-figure salary job in finance to pursue real estate full time.
- Quick takeaway: Note that David as a result of investing in his education, he earned a significant income as both a team leader in a commission-based role, and also as an entrepreneurial investor.
- How could self-directed learning improve your outcomes?
David offers insight into his business model as a possible career path for those leaving prison or jail. He acquires homes and sells them on contract as rent-to-own properties. He finds this work gratifying as it allows people with bad credit histories a chance of becoming a homeowner. David outlined several other advantages of his career.
Under his business model, he foregoes having to make repairs or maintain the properties. Those responsibilities fall on the renter. I recall him saying that he did not even own a hammer. Furthermore consider the following:
- His position does not require him to hold a license.
- None of his associates in the industry have ever inquired about any encounters with law enforcement or his criminal record, leading us to believe that even people in jail or prison could prepare for such a career.
- He described an abundance of finance options that people could consider—provided the person first developed strong communication skills, basic math skills, and a strong work ethic.
David focuses on buying low-cost homes, such as:
- Foreclosed properties – A foreclosure occurs when a bank or other lender takes possession of a property of a borrower who continuously fails to make payments. The lender can then sell the property to an investor like David, who buys the property and sells it at a profit.
- Houses that require extensive repair – Often known as “fixer-uppers,” are properties that may need cleaning, redecoration, reconstruction, or related work. Buyers like David complete these repairs to raise the property’s value to get a return on their investment when they sell the property. This process is commonly known as “flipping” in the real estate industry.
In the video, David also expressed the importance of finding the “sweet spot” for home prices in a given area. He focuses on properties that cost around $50,000 or below so that his tenants could reasonably afford to pay one-fourth to one-third of their income in monthly rent.
David also taught us about hard money lenders. Investors would provide funds that other investors could use to build a portfolio of income properties. Such lenders were usually private individuals and companies rather than banks. Hard money lenders generally charged higher interest rates than banks, yet they offered a reasonable way to get quick access to funds; hard-money lenders did not concern themselves with a borrower’s credit score, as the underlying asset (the house) guaranteed the loan. David notes that an interest rate of nine percent or below would be a reasonable amount when working with this type of lender.
David’s inspiring story showed us how an investor could buy a property with the money borrowed from a hard money lender. After the investor made repairs and cleaned the property, the investor could choose to sell the property. He could both repay the lender, and earn a profit for the time he invested in the project. Another option would be to get permanent financing for the project, based on a property’s after-repair value—the estimated worth of the property after all renovations are completed. This option might allow an investor to keep the asset for rental income.
Other pieces of relevant advice included:
- Hiring a reliable accountant – David stresses that an investor should rely on a savvy accountant who mastered the science of writing off business expenses.
- Understanding equity – Equity is the difference between what a borrower owes on their mortgage and the property’s worth.
- Creating passive income – The ability to generate revenue with little long-term time commitments. David earns passive income from his tenants, who pay him rent every month. If 10 of his tenants pay him $300 per month, he earns $3,000 in monthly passive income.
- Understanding depreciation – Depreciation is a reduction in the value of an asset, such as one of David’s properties. David is obligated to pay less in taxes when a property’s value depreciates.
At the crux of David’s success is mastery of critical thinking, communication, and math skills. He commented in the video that every opportunity to earn income in his life stemmed from his “investment in improving [his] writing and communicating better with others.” His statement is evident from his first deal – a $10,000 property that he acquired through business contacts he knew from his job at the golf course. He stood out to these associates because of his habit of calling other people by their names and articulately expressing himself. David also emphasizes the importance of knowing how to read and write well. He advises listeners to adopt small changes to their habits, like double-checking emails, avoiding run-on sentences, and ensuring that messages are free of errors like misspellings. Lastly, he stresses the need for a basic mastery of math. His career requires him to use simple arithmetic, not more complex subjects like calculus or geometry.
As I served 9,500 days behind bars, I always sought inspiration from those with a will to advance themselves. People from all walks of life can apply the same principles that David outlines to prosper.
A person with a criminal conviction could circumvent many of the hurdles by working vigorously and finding creative ways to engage with the business community. David is not required to hold a license, and he said that people would not face questions about a criminal record in this line of work. He does not view a prior prison sentence as a significant impediment for someone hoping to begin their career in his industry. On the flip side, laziness would be a major obstacle for many people. Successful investors must work unremittingly to find good deals.
David shares that the Lord blessed him with financial acumen and a unique talent for math. His comment reminded meof the Parable of the Talents, which describes the importance of actively engaging in life to take advantage of blessings given by God. David had to use his gifts by purposefully working towards his goals and lead by example. Had he instead remained passive by failing to act, he would have lost his blessings.
Participants should understand the value of taking the initiative when listening to the story of David’s success. David became a leader by always driving himself to accomplish goals, as evident in his self-directed study of the real estate industry as he transitioned his career. Similarly, people in prison and jails must capitalize on every opportunity to improve themselves even if structured rehabilitative programs were not available.
By following David’s example, incarcerated people could immediately begin adopting an ethical value system and a habit of writing goals down as a self-improvement exercise.
People in jail or prison should also learn the importance of solid skills in math, communication, and critical thinking skills. The mastery of these concepts often overlaps:
- To be a good writer, an individual must be a good thinker.
In addition, David agreed that the “pen is mightier than the sword” because the most influential leaders communicate ideas and encourage others to embrace their knowledge. Lastly, David posits that mastering rudimentary math concepts “unlocks the world” for success in a career like his. A returning citizen with such skills could quickly learn to use database programs like Microsoft Excel or Google Sheets, becoming a more attractive candidate for employment in the process.
David benefited from his background as an educated professional with extensive business experience and a lack of criminal history. However, his ability to become wealthy on commission-based jobs still required a considerable degree of tenacity, confidence, and adherence to his value system and goal setting.
Similarly, returning citizens should be willing to work long hours and perfect their communication skills for similar success. Too often, people leaving incarceration believe that they will be restricted to jobs with penurious wages or limited hours. Careers like David’s show that returning citizens can still forge a better path for themselves if they maintain a forward-thinking outlook on life and a willingness to work hard.
- How do you believe that David’s work ethic allowed him to prosper financially?
- Why is it important to use and continue refining your talents?
- Why do you risk losing talents if you don’t use them?
- How can improving your communication, math, and critical thinking skills enable you to succeed in a career like David’s?
- How do you think David uses basic math skills at his job on a day-to-day basis?
- David left a high-paying job in finance to pursue a career in real estate. How does this decision reflect on David’s self-confidence?
Leadership Skills and Recap
Beyond his strong value system and diligence, David has robust leadership skills. In the mortgage industry, David had often managed teams of workers, inspiring them with his work ethic. He always believed in “showing love” to his colleagues, even when they didn’t work to their capacity. Good communication skills have played a central role in his success as a leader. When dealing with associates in business, David emphasizes that it is better to be “interested” rather than “interesting” by showing genuine care about others’ concerns.
David has always remained interested in understanding the other person’s situation or point of view in his interactions with others. Having such a people-focused approach helps David forge and strengthen both his personal and professional relationships.
Similarly, David has shown compassion even in his role as a landlord. He had to evict two tenants in the entirety of his career but only did so as a final recourse. One of his evictees had severe mental health issues; David remained in contact with her family and attempted to treat this individual with kindness as eviction procedures progressed. Likewise, David advises that investors inform their lenders of any issues that could hinder payment at first notice. An open line of communication allows each party to arrange alternate payment options.
Throughout the interview, David shows how his life principles align with the lessons we teach at Prison Professors. He has consistently defined goals and identified incremental steps to fulfill his dreams, as seen in him following his set of principles known as the “six Fs.” Through his hard work, David consistently demonstrated total commitment to his success and always maintained clear aspirations regarding his future. In addition, he was always action-oriented and held himself accountable to achieve his purpose in life. He also demonstrates authenticity, celebrates his accomplishments, and expresses gratitude by giving back to others.
Critical Thinking Questions:
Write at least three paragraphs, with a minimum of three sentences each, for each of the following questions:
- David writes down and recites his goals aloud twice a day. What are effective routines that you can adopt to remain focused on identifying and carrying out your goals?
- How do you believe the presence of David’s father as a role model led him to become successful as an investor later in life?
- What key business concepts did you learn in this lesson? How can you apply these concepts in your career if you pursue a similar path to David?
- How can you develop a value system similar to the six Fs that David follows?
- How can acquiring strong communication, critical thinking, and math skills help you succeed upon your release?
- How do you believe a strong work ethic and commitment to goal fulfillment can help you as you return to the community? How do you believe David’s work ethic helped him reach success as an investor?
- How can recalling people’s names and treating them with courtesy help you succeed in professional settings upon your release?
- How can a commission-based role in a career like real estate offer you a venue into a financially rewarding livelihood?
- What resources do you have at your disposal now to enhance your communication skills? How can this help you become a better leader as you prepare for release?
- How does David’s story inspire you to live a law-abiding life after prison?