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Doug Ottersberg: Mobile Home Millions, Lifestyle Design & Taps

We are in for one incredible show.

My guest is going to give us a little insight on how it's possible to retire in 5 to 7 years with steady, predictable income investing in a certain area.

He is the author of The Serious Business Owner's Guide to Serious Business Success. He is a mentor to successful business owners, entrepreneurs and investor. He's been featured on radio, television and websites such as BankRate.com and now WealthFit.com. He and his wife have retired and were financially independent in their 30s.

My guest is Mr. Doug Ottersberg. 

In this show, we are covering a lot. I am excited to bring you this show.

He's going to talk about the big thing that has been important to him, peanut butter cashflow and why everybody should want peanut butter cashflow, how to make your money work for you, two things that allow you to be the bank and why do you even want to be the bank, how to make money with mobile homes or in some neck of the woods, manufactured homes and why you shouldn't buy into the stigma that exists around investing in mobile or manufactured homes.

We also talk about a little personal finance such as the 10-10-10-70 Rule and how that can help you create wealth in your life. This is a fundamental principle. Towards the very end, we get into how to program your mind for success and see opportunities you've never seen before.

With that said, that's a lot. Let's get to it. 

Dustin
It's the early 1990s. The setting, Downtown LA. It's stifling hot. You've just returned to your office after trudging through crowded streets willing a client's computer while constantly being hit up for spare change. To top it off, the stench of human waste mixed with bus and car exhaust is almost more than you can take. As you finally make it up to your apartment on the mezzanine, standing in front of the mirror, changing out of your suit that is sweat-stained and soaked, it hits you. “Why in the heck am I putting up with living in a loft in Downtown LA surrounded by the homeless, mentally ill, addicts, etc.?” It’s no longer cool as you thought it would be. You realize this atmosphere is downright depressing. Doug, take us back to this moment in your life and how do you pivot from here? What's going on in your world and what do you decide in this moment?
Doug
Thanks, Dustin. I've got to tell you that someplace I don't really like to go back. However, in those days when I'm struggling, something's got to change. That's where I was at that moment in time. I had remembered something that an early business mentor shared with us. At the time, we were running a computer maintenance company. We had some great contracts and clients. Business was good, startup mode and yet he said, "This business will provide you with a nice lifestyle and you'll never get rich." I'm like, "This is depressing. It's dragging me down and if I don't get out of here, I could end up like some of the folks that are around here. I need to get out of this environment." The moment I made that decision, the universe started responding.
Dustin
What happens next? What do you decide? You're like, "I'm not going to do this anymore." 
Doug
I started looking and we had a business mentor that shepherded us along. A couple of the things that I learned from him, one was you need to learn to make money work for you or you'll always be working for it to get something other than you working for you. I'm like, "What do you mean?” These were new concepts. No one had ever shared these with me. He's like, "I took money out of our business and I invested in real estate." I'm like, “That's interesting. Tell me about that." We had a chat about that. In looking for those opportunities, one of the other thing that he said is, "While you're out there looking for it, whether it's real estate or something else, remember that some part of every day's work should be of benefit to you in the future." 
Dustin
What do you mean?
Doug
Most of us, we get a job, put in our time, get our check and it's done. To get another check, you've got to do trade more time. A lot of people get into real estate, for example, and they do work and they sell and they’ve got to do it again and again. You can make great money doing that and yet there was something else that I learned that fit what he said. For example, instead of selling something and then getting a chunk of cash, what would happen if you sold it and you let people make payments? In other words, you become the bank. He's like, "Doug, there are two things that work 24 hours a day, 7 days a week, 365 days a year, rent and interest. You should have some of both." 
Dustin
Can you remember that first real estate deal that you did?
Doug
I can. 
Dustin
What was it?
Doug
We had gone to a number of seminars and in fact, one seminar I went to was as a result of somebody being in the info-marketing business. I was at then called Price Club, which is now Costco. I got a book by a gentleman named Charles J. Givens and subscribed to the newsletter, which I now know was lead gen. I ended up at one of their seminars and went through their course. I was the one that got the most credit line expansion on my credit card. I went to a seminar in Florida by a man named Jimmy Napier. A lot of old-timers know who Jimmy is. I went with a friend and his mother who was already in the note buying business.
As we went into this seminar, she said to my friend and me, "Boys, keep your mouth shut and keep your ears open. Remember, you never know who you're sitting next to. A lot of people here look like someone you might see on the street or shopping at Walmart or whatever. Remember, they could write a check and buy this hotel." That was good advice. At that point in time, there were a lot of people in that room that were in the mobile home park business. They were buying, selling and financing mobile homes. I looked at that and I said, "This really fits the mold because you can buy a mobile home, sell it, finance it. That's doing a little bit of work now that will benefit you in the future." You put a deal together and then your job is to maintain the deal. Get those monthly payments coming in.
That first deal, as a result of having that training, at the time we were still living in LA, we went out and found a mobile home for sale about an hour north of LA. We bought it, fixed it up and sold it. We made a couple of thousand dollars. We're sweating it because no buyers were coming and we had to pay lot rent but we did sell it. We made some money. Fast forward, we went back to a couple of seminars. At one of them, I liked the idea of getting some rent and that's when we found out about the mobile home parks.
Dustin
First deal, you flip it and you make some money. You're like, "This is real, this is legit." You're excited. You kept that in the back of your head, “Cashflow, rent, interest, that's the thing that I need.” You would think you would buy a mobile home and you would rent it out, but that's not what the way you went. You bought a whole mobile home park. How in the heck do you pull that off in your second deal?
Doug
Going to these seminars, we found out that there were basically two groups of folks there. There were active investors, people like myself that wanted to get something going for ourselves and we're the ones out looking for deals and we're doing the work. There were also passive investors there, folks that had money and didn't want to do the work. We found out those two make a good team. We had some passive investors that we worked with. While we were there, I had talked to some mobile home park owners. We had gone back home and done some research. At a subsequent meeting where we were at with the same group of investors, I raised my hand and I stood up and said, "This sounds like a really good concept, but I don't think that'll work where I live." No real estate educator has ever heard those words.
The guy shook his head and to his credit, he had a really good answer. It was like, "Son, you aren’t a tree. You all can move." That stayed with us. At a future meeting, we made the decision that we want to get into this business. At that time, I didn't know it but I subsequently found out years later that this was the Law of Attraction. We were able to stand up in front of that room and say, "Hi, my name is Doug Ottersberg. I'm living in LA. I found out I'm not a tree. I want to buy a mobile home park and I will go wherever that deal is." It turned out that there were a couple of folks there in that Florida seminar room from the Albuquerque area. One was a broker and they went home. They put an ad out that basically said, "California investor looking for a mobile home park in your town." They generated a seller's list and called me up.
I flew over and we drove around the state of New Mexico looking at these mobile home parks. I don't know if he did this on purpose. I think he probably did, but when I got off the plane, he handed me this fat appraisal on this one mobile home park. He showed me a bunch of mobile home parks that were pretty trashy. The last one we looked at was the one that I had been reading this appraisal on. In real estate education, they say, "Buy the worst property in the best neighborhood.” You can because you can't bring the neighborhood up. In effect, that's what we ended up doing. We bought a trailer park from a gentleman who owned other properties.
This had been a thorn in his side because the septic tanks had failed and got ordered by a judge to live in the property while it got fixed. Here we come from the outsiders not knowing all of these things. We had what's called a don't want her. He did not want that property anymore. We were able to purchase that with owner financing, very minimal negotiation and signed a contract. We went back to LA. I went to my office and one of our employees was like, "How'd it go?" I'm like, "I bought a home park. Now, we’ve got to figure out how to pay for it." 
Dustin
I love that you jumped in. Do you ever think back to what if this mobile home park had been in Alabama, Montana, or Maine or somewhere cold?
Doug
I have. Getting older, we have the advantage of being able to look back and to see those turning points in our lives. I have no doubt, Dustin, that we've been guided and put where we've been needed. If that's where we were sent, that's where we would end up. It was Santa Fe.
Dustin
I got to ask you about that because I'm trying to rack my brain for people that I know that live in New Mexico. You might be the only one that I know. I don't know if that's a common thing. It depends on where you live. Me being from Florida and now in California. When you got there, did you have any apprehension about the area or is it God's country? Is it a beautiful land there? 
Doug
It's gorgeous. Santa Fe, New Mexico is one of the top world and Conde Nast Traveler destinations in the world. People come from all over. A lot of people ask me, "What is Santa Fe like?" In Santa Fe, if your family came up through Mexico with the Spaniards 800 years ago or they were already there indigenous or there's the Santa Fe when you fly in and your private G7 and go to your fourth house, and then there's everyone else. When we got there, it's in the Southwest, very heavily Hispanic Latino. My wife is originally from Mexico. That turned out to be 98% of our clientele. We felt right at home.
Dustin
Even though you were a city boy from LA?
Doug
Growing up in Nebraska, the closest I got to that culture was Taco Bell. I could say taco and burrito. Having been in LA, I feel like I was being prepped for the last number of years. I lived in Downtown LA. After I met my wife, when I went to Mexico to ask permission to get married, my future father-in-law asked me in Spanish, he said, "Where did you learn to speak Spanish?" My answer was, "In the streets." He smiled and laughed. He's like, "All the practical words." I felt like I was being prepped. By the time we moved there, we do feel blessed. Santa Fe is an amazing destination. A lot of people love the opportunity to come visit Santa Fe and see what it's all about. We've got the four seasons. It's a great environment.
Dustin
Doug, I want to talk about wobbly boxes, trailer parks. There are manufactured homes, mobile homes, and I'm sure you know all of the terms there. Generally, when one says mobile homes, it's like, "That's like the stepchild. This is not a PC thing." The bottom of the ladder in real estate, you've carved out a meaningful existence, one that has provided for you and your family. Why mobile homes? Why does it get such a bad rap?
Doug
It comes from people's exposure and how they enter into the business. As we know, a lot of real estate investing is sold by, “Here's me in front of the private jet and our mansion with the Lambo that I bought with all of these checks.” That’s great. Whatever it takes to get somebody excited and want to change their future. I came at it from the perspective of having gone to training that was designed for note investors. It’s a different mindset. Do work now, in other words, buy a note or better yet, create your own note and get paid. Not a big chunk all at once, a small chunk every month for the next 5, 7, 10, 15 years or more. I could see how that worked. I liked that idea. On top of that, when I was looking at my what's next, real estate seemed to make a lot of sense because I was thinking, "Let's find a business that people will always need like food, clothing, shelter." 
The first two got thrown out. No way do I want it to be in a restaurant or open a haberdashery. I'm like, "Shelter, let's look at shelter." About that time, I was reading the biography of Sam Walton. They went out to the small towns. I thought to myself, "A mobile home park is a small town.” You're looking at that and I'm thinking, "In business, you can have high volume, low margin or you cannot do the high margin but low volume business." I thought to myself, "In housing, the high volume and low margin would speak to affordable housing." It happened that we were put in Santa Fe, which is a very expensive area. We provided a service that a greater volume of people really need it. I'm like, "That's a win-win. Where else can you do well by doing good?"
With that, in looking at the mobile homes, manufactured homes, a lot of people poo-poo that because they're looking for that big score. They want the big check. If you take a longer-term approach, I was like, "I would rather build cashflow as opposed to having a one-time hit then having to go back to work to do it again." Building a money machine, that helps other people. It helps the buyers because in mobile homes, manufactured homes, the seller, when they want to sell their home, most people want the cash. It’s most of the buyers that are looking at that level because that's what they can afford. The buyer is looking to get out of an apartment.
Dustin
Why?
Doug
Because you've got people on top, people on the bottom, on either side and your car is somewhere out there getting vandalized. At least in a manufactured home, a couple of things happen. You don't have anyone on top or below and you've got space in between the home. It's your own home. A lot of our buyers are happy because now they have a yard that their kids can play in. The cars right next to the house, not out there in the parking lot somewhere. In addition to that, when you rent, what do you have when you move? Receipts. A lot of people like the idea of, "This is a transition. I'm renting the space and I own the manufactured home. When it's time for me to move on, at least when I sell that home, whatever I get is more than I had or would have if I just rented." When you understand that, it makes a whole lot of difference.
Dustin
You've educated me before there is a nuance and we're throwing out terms. One of those things that is beneficial for folks to know is you had mentioned modular homes. We know now tiny houses is part of the marketplace. You said manufactured mobile. Are these all the same? Are they different? If so, how?
Doug
Technically, they're different. It all comes down to the code. A mobile home is a factory-built home product that was built prior to 1976. Why is that date important? The Department of Housing and Urban Development, HUD, has eight code to which these manufactured homes are built. The code was changed in 1976 to address some issues that the industry had before to make the homes better built, more energy-efficient, those types of things. In the code, the product is referred to as a manufactured home. Technically, anything before ‘76 is a mobile home. After that, it's a manufactured home. The HUD code is a nationwide code. It means it preamps local zoning in that wherever there is zoning of our one single-family residential, a manufactured home can be placed.
Dustin
If I were to buy in a subdivision, I could bring my mobile or my manufactured home, one or the other, and put it down there?
Doug
The answer is maybe. There are a lot of things that local governments and zoning will do to dissuade that activity. You have to stuck to it, you have to build an attached garage, you have to do a lot of things. For a long time, there were issues with financing for manufactured housing. There was desperate impact because site-built homes had different and a lot of people would say better terms of financing than manufactured homes. That's changing now. There are new guidelines, Fannie and Freddie, for buying these types of loans. When we got started, that was the opportunity. There were a lot of folks that needed this product, needed the financing and if you model what larger businesses are doing and bring it down to a local scale, which is what we did. The modular homes on the other hand are still factory built and they are built to whatever that local building code is. They're factory built which they're not outside. They're not being built subject to the weather. They're in a controlled environment. They're built and shipped to the site and where they're installed. Modular homes are automatically qualified for the same financing that a site built home with as well.
Dustin
What about this tiny house craze? Is that in your world, outside your world? 
Doug
We've seen those. They make a big fit because there are a lot of older manufactured home communities, mobile home parks, if you will, that were built long time ago when houses were smaller. They lend themselves as a great place where you pull one in. The challenge with them is they're not built to any code. Therefore, the local zoning authorities don't know what to do with them. There are some challenges that arise from that.
Dustin
Can you buy a tiny house and then rent or lease space at a mobile home?
Doug
You can. Where you run into challenges sometimes is if you want to hook up to let's say natural gas, you’ve got to have a permit but where do you go to get a permit? What authority certified that building? What code was it built to? It’s like, “It’s built on Uncle Joe’s code because he built it on his garage.” Sometimes there are some challenges to that.
Dustin
This is not the thing that you created. You have termed something, peanut butter cashflow. Will you define what peanut butter cashflow is and why I need to switch from almond to peanut butter cashflow?
Doug
We have the chunky peanut butter aficionados. We also have the smooth peanut butter aficionados. Cashflow is similar. You can do a transaction and get a big chunk of cash. That's typically a buy-sell transaction. You buy it, do some work, sell it, get a chunk of cash, an influx of cash. Instead of selling it and getting the cash all up-front, if you decide to become the financier and you say, "Put a down payment and then you can make monthly payments to me," those monthly payments coming in are more like that smooth cashflow month after month. The peanut butter cashflow is the best of both worlds. When you sell, you get a chunk in the form of a down payment. For the next however many years, 3, 6, 7, 10, 15, you get that monthly check coming in just smooth.
When we were starting out, our other investor friends, they're like, "You're doing what? Mobile home, are you kidding me? What kind of money is that?” I’m like, “$100 a month, $200 a month." I asked him, "How much did you spend on gas? What's your insurance payment? How much did you spend on food every month?" When you're first starting out, then you stop thinking about it and it’s like, "If I can get a payment coming in that covers one of my payments going out and I do one deal, then I did 2, 3, 4, 5, 6, 7, pretty soon, all of our monthly bills were covered.” Is that what my mentor said? Something other than me working for me as a result of the work I did in the past is still benefiting me out in the future. I can see what they meant.
Dustin
I can so appreciate this. When I got started, the journey at that time, everyone was making money in real estate and you parked your Ferrari in front of the house that you don't own and you flip it in in a month and you get a six-figure payday. I got caught up in all that flash. I didn't go that route and do that. My mindset at the very beginning and being introduced to real estate was I got to go chase these deals versus the seminar I wish I would have stepped into and paid more attention to which is the long-term thing. One thing I do want to ask you though, some people also knock mobile homes because they don't appreciate. That's my understanding. These are depreciating assets, meaning don't go up in value. If I do the same work that I'm doing, but I shifted over to a single-family home and rent it out versus a mobile, I'm going to capture appreciation as a benefit. What do you say to that person that presents that argument to you? 
Doug
That's not always the case. There are areas of the country, primarily West Coast areas, some other areas where due to restrictions placed on for example, rent control, the places become very expensive. They do appreciate, that's one case. There are also other opportunities out there. Typically, if you buy a manufactured home, a mobile home in a land lease community, that may be true. A lot of that is driven by the local appraisers. There are also opportunities, especially in New Mexico and other areas of the Southwest and Southeast where somebody will buy an acre or two and they'll put a manufactured home on it. We own those as well. We'll buy those and we'll fix them up. We have held those in our portfolio as rental properties. We picked up a lot of them years ago at foreclosures and worked with private lenders. We do the work, they put up the money and they get paid back first.
After they get paid back, we have this asset and we've owned them for years and they've appreciated over the years because they have the land attached to them. It's the whole process of we're not even looking for appreciation. We're buying the appreciation because we're buying at wholesale prices. We aren't looking for appreciation, we're looking for cashflow. We want something that will cashflow. It makes it good for the buyer because they can afford it. It makes it good for us because we can rent it or sell it for a monthly payment enough that we can borrow money from a private lender, pay for the deal, use our own money as well so we've got skin in the game and get everybody what they need. The customer gets a house they can afford. The lender gets their money back and a good return, then we end up with the cashflow.
Dustin
You mentioned private lenders, or at least it stuck out to me a couple of times. Are you not able to get traditional financing on mobile homes or manufactured home parks? Why private then?
Doug
One of the things I realized early on is when you're dealing with site-built homes, there are a lot of other people and entities that have a say about your success. Your success is tied to appraisers, lenders, bankers. That didn't happen in the manufactured home world. We had none of those. We can move faster. I could make a decision. I didn't have to wait to see if it appraised and if the lender was going to give the buyer or us a loan. We could just move. That worked out really well, especially when one of your top values is freedom like mine is. We'd go out and we could get things done. Once you establish yourself, we have a rule that we learned early on when you're working with private lenders, I don't eat if they don't get paid and we've never missed a meal.
Dustin
We talk about diversification on the show. You obviously are a big fan of manufactured mobile homes and parks. Do you diversify? Do you get into other forms of real estate? Do you even go beyond that? Do you have a couple of stocks in your portfolio? How do you think about this?
Doug
Over the years, we have. What I have found is we've diversified, we poked around into other investments and we've got a genius zone. Stay in your lane. There are a couple of times I poked her head out and gotten my hand slapped. I chalked that up to experience. With manufactured home communities for a long time, we didn't have a whole lot of competition over the last number of years. A lot of investors are chasing yield and there are folks that are looking to get into the business. We've had folks come out to Santa Fe and spend a couple of days with us. We showed them the ropes and folks that want to be an active investor. There's a lot of institutional financing available for those types of properties. Those have been good to us. What we've been looking at lately is similar to what we do with manufactured housing. We've been working with multifamily investors, apartment buildings. We work with other investors in syndications. This is our 26th year. Our youngest is now investigating college. Our two oldest are out. We're going to be empty nesters. We're transitioning parts of our portfolio into things that don't require as much of our work as they have in the past. 
Dustin
With mobile homes or owning parks, you don't have to manage them. Are there property or management companies out there? You guys are so entrenched into this business, it's become second nature. Let's say they bought a park. Do you recommend that they live in that park or at least rent it to manage it so they can get a feel for it? What's your take there?
Doug
Everyone is different and yet that was my strategy. I'm the kind of person that I'd like to go get instruction and then I need that hands-on. I do recommend that for most folks. The sweet spot for us has always been what we would call smaller communities.
Dustin
What’s smaller to you?
Doug
Fifty units or so. Let's think about it, you have institutional grade. They're looking for 200 units and above. One hundred to 200 regional type investors or very well to do well-financed, even the syndicators or individuals, 100 spaces or less. The larger investors want those for that reason that they can hire a management company to take care of them for you. Underneath that, it depends on the market. Our strategy was we bought what we had. As we got to know other local owners, we bought smaller communities in the same geographical region so we can manage it from a home base. That suits our temperament.
Dustin
I think back to my young self. If I had come across this interview back in time and I'm like, "This guy, Doug, I like this smooth peanut butter or almond butter." How do I find these properties? How do I find someone that's going to be motivated to either sell a park or sell a unit?
Doug
We always recommend to go ride the speed bumps. What does that mean? A lot of times, until you're looking for something, you don't notice it. I've had people tell me this, "After I talked to you, Doug, I started driving around. I saw a mobile home park. I never saw it before. I always just drove right by." We see them all the time. On the ride down here from LA, we took the train and I’m like, "Honey, there's one over there."
Dustin
I have taken that train and I have not noticed these mobile home parks.
Doug
You start looking around. One of the things that we found, which was an advantage for us, not only where there are a lot fewer other entities involved in doing deals, there were a lot of less competition because people weren't looking for them. By driving the speed bumps, most of the communities have their speed bumps set up in the road. Once you see one, start driving through. If you see one with a for sale sign in it, go talk to the community manager. Find out what it takes to buy a home here. Tell him, "Would it work if I were to buy it?” Here's the key, sell it to somebody that you approve of and gets qualified. A lot of times, that will work. That's what ended up happening for us. When we were first getting started, we went out and got a dealer's license so that we could legally buy and sell. Every state got their own laws. However, we did that because we had some vacancies. We owned the community.
That is a long-term wealth-building, cashflow generating machine. When we get a vacant space, we would end up going out and buying a home, bringing it in, setting it up. Sometimes we would rent it, sometimes we would sell it depending on what the market wanted. When our parks got full, then we would find that there were other communities that had vacant spaces. We would buy a home, bring it in, set it up after getting clearance from the manager. We would sell the home and we don't put anyone in. There are guidelines that we are required to meet. We have to make sure that the buyers are who they say they are. We do background checks and all of that. We have to make sure that they can afford the home. Just like getting qualified at a bank, we pretty much do the same thing.
Dustin
You mentioned the dealer's license. Are there real estate agents that don't sell mobile home parks or do they?
Doug
They sell mobile home parks.
Dustin
Actual units?
Doug
Yes. In some place, they do. It lends itself to the environment. Each area is different. Some area realtors don't want anything to do with it.
Dustin
It made more sense because you were more in trance versus become a real estate agent per se.
Doug
For my purposes in looking at when you've got a license, you're required to do a whole lot of things that when you don't have a license. There was more flexibility and freedom for us not to be a realtor. We complied because if you buy in our state more than one in a year and sell it, you have to have a license, which I did.
Dustin
Let’s say I’m reading this episode, I have awareness and I see a mobile home park and I'm not going to buy the whole park just yet, I'm in training. I find a property and I got it. My understanding is you, your wife and your business, you have evolved and you're into all parts of this business. You provide financing. Is that correct?
Doug
We don't make loans. Our set up, we work with mortgage loan originators. It's seller financing. We don't make loans to people. It is like a “buy here, pay here” car lot. It's the same thing, retail sales, installment contracts. The big thing is working with a mortgage loan originator to make sure that all the paperwork is done correctly and that the buyer can afford those monthly payments.
Dustin
If I find one, do I come to you or do you show me how to do this? What is the play?
Doug
Both. We've had folks who are, "I really like that. I want to know how do I do this where I live." We've had folks come out and work with us for a couple of days. We show them what we do and take it back and they do it at home. That's pretty much what we've been able to show others how they can do the same thing.
Dustin
We talked a little bit about the license, agents and stuff like this, but to get into this, you don't have to get a license, do you?
Doug
It depends on your state. One of the things you all to have to do as a business person is to find out what the laws are in the state where I'm working regarding what I want to do. Sit down and read them. In our business, it's the Mobile Home Park Act in our State Statutes. There are some other finance companies, those kinds of things as well. Find somebody in the business, talk to an attorney and find out what you need to do. Most states have a Manufactured Housing Association. That would be a good resource as well to find out.
Dustin
I appreciate you sharing that and adding clarity. I do hope someone finds this and goes investigates further, reaches out to you. One of the things I want to do is transition our talk here because we've given a new awareness and clarity to people about mobile homes and you've definitely given that to me in a short time. In doing so, there's a bigger play in this conversation. Doug, what I've always appreciated about you is you always came into situations in prior businesses where you always seem stress-free. You were able to show up and you weren't necessarily concerned about sales or the money. In my journey in life, I was always worried about the money and the stress and feeding that particular business. You've built a business to support your lifestyle and your work alongside your wife or she works alongside you, whatever the PC way is to say that. I see you on Facebook every now and again. You're traveling and your kids are going to amazing schools. How is it that you've been able to reverse engineer this?
Doug
Looking back, I can see being guided. Frank McKinney wrote a book called The Tap. We've had multiple taps over our life. I give all glory to that. I'd have to say, paying attention, even though I didn't know but that's what was happening. Over the last number of years, I've come to understand how powerful having a vision is. Having the right mentors that care to, "I've been there, let me show you what works." To put yourselves in those environments on purpose to find out what works, I'm a big proponent of that. Saving time. Money buys speed. What is it that we want? My wife and I were very intentional. That was a tap moment. When I met my wife, I was walking out front of LAX baggage claim and I had this tap. I like to say God was playing Barbie Dolls that day. I was Ken walking along and it's like, "Look over there. There she is." I turned my head and I still have that image of my to-be bride at that point. I know exactly what she was wearing to this day. That image is burned in my head. I kept walking, I put my bags down and I went to use the payphone. I came back from using the payphone and that woman was sitting next to my bags on the bench.
Dustin
Weren't you nervous?
Doug
I wasn't that nervous. I could tell that we were both waiting for a ride. I made a comment to her. I said, "Don't you love punctual people?" She turned to me and she said, "Que?" She speaks Spanish. In between her English and my Spanish, I found that she was single, wasn't dating anybody, was living with an aunt. She was studying computers and English. I'm like, "Isn't that interesting? I own a computer company and I’m studying Spanish." That was a very interesting moment.
Dustin
Any advice around seeing the taps because I am now starting to realize this. When you're young, I'll only speak for the guys here, I'll say achievers. You run pretty fast and sometimes you don't recognize those steps. As you get older, you start to realize how crazy life is and precious. How do you recognize these taps? How do you slow down?
Doug
One is knowing what you want and that's why it's important to have a vision. What do you want to be, do, have? What do you want your lifestyle to be like? I now know for certainty, I met Ana having done an assignment. I had been dating another woman and I went through a breakup. For the first in my life, I sat down and talked with a counselor, a coach. During the conversation, I kept using the word girls and she was like, "There's your challenge. Are you ready for a woman?" I'm like, "What?" She rolled her eyes and she was like, "What does that mean to you? Go home and write out a shopping list. If you were shopping for her, what would she be? Who would you need to be in order for her to even notice you?" I did that. Later on, I realized it's very powerful to get out of our heads and onto paper what we want.
The same thing holds true in life. Without knowing this mapped out, it'd be great to be able to work at home and be there for the kids as they grow up. Later on in life, when I found out about vision boards, we did a vision board and wrote out exactly what that would be like. The home that we have now found us. As a result of that, it's a very long story but suffice it to say, the home found us because of the vision board exercise we did. When we went to look at that home, one of the things I had written down is this home will be made financially feasible and this home will have a master bedroom that goes out onto a deck or a patio. That also goes into a den or library type of situation. We were there looking at this home, it's at the end of a private drive on top of a hill overlooking Santa Fe. The owner had us out front. He was like, "They're on the side, you can see up on the second floor on top of the deck, that's the masters. It goes into the den.”
The hair on my neck stood up and Ana squeezes my hand. We go inside and we're talking with the owner. Then he gets serious and he looks at us and says, "Will you let me finance this for you?" For once in my life, I could teach a seminar on how to sell or finance. I shut up and like, "How would that work?" That's how it's done, Dustin. Think about what you want, write it down, imagine having that, closing your eyes and knowing what you want. Two other things, watch for the signs. The last thing is where a lot of folks seem to stumble is they see the sign that you have to take action. You've got to take action and not just any action. I call it inspired action.
Dustin
Give me the difference.
Doug
For example, we were living in the house we did now. We were driving down the street, we saw a builder was doing a subdivision for manufactured homes. We ran in and we got a plat. We looked at it. At that time, we were living in a two-bedroom, one-bath mobile home in our park. It was great because the moment we closed on that mobile home park, we became financially independent. As they say, when you exit the rat race is when your passive income exceeds your monthly expenses. We were there, day one. We decided to take action. We looked at the plat, we came back and said, "We'll take that lot." By that time, that lot had been sold. We said, "We'll take the one across the street." The realtor did something really smart. She said, "Why don't you put a backup offer in on the lot you want?" We did. She called, "Great news. Their financing fell through. You've got this one under contract, which of the two do you want?" I looked at my wife and we smiled and we said, "We'll take them both." Things start happening.
Later on, Ana was taking our two young kids on a walk. She walked by a little handwritten for sale sign and she wrote down the number and this turned out to be a property on a corner of a minor or major intersection. We saw the sign and we took action. We called the number and we went. I did everything we were supposed to do. I had missed out on buying some really great deals because I went to look at property. This time, I decided I'm going to buy property. The huge distinction, if I'm going to buy it, what would I need? I'd need to have the contract. I printed it out and took it with me. I envisioned walking up to the door, knocking on the door, the gentleman that we're supposed to meet opening the door, smiling and shaking hands, walking through the house and ending up at the kitchen table, all of these things that we learn and him and us smiling and us signing the contract. That's exactly what happened.
Dustin
You subscribed to the 10-10-10-70 Rule. Will you explain to folks that are learning about this as a methodology for dispersing money, creating wealth?
Doug
Whatever comes into your world in terms of money, that's 100%. I was taught that you take 10% of that and you give it away. Some folks are like, "That's crazy. Why would you give away money?" What you're doing is you're demonstrating faith in yourself and your ability to make things happen. Give it away because depending on your philosophy and where you come from, it's not ours anyway. Part of my belief structure is that I'm a steward, a temporary one at that. It's my job to take care of these properties while they're in my possession and to give back. That's the 10%. The second 10% is to save for investment. Most people never make investments because they never have anything to invest. The third 10% is to educate yourself on how to invest. 70% then, what do you do with that? You learn to live on 70% of what you make.
One of our teachers told us early on is that every one of us will serve a period of financial sacrifice. What most people don't realize, it's up to them when they serve it. You can do it when you're young and you can take a flyer, a chance on different things. I've heard that call you sample the smorgasbord. It's like, "What should I do? Should I do flipping? Should I do rehabs?" Try it all and see what suits you. If you step out there and you make a mistake when you're young, what's working on your side? Time. Time is the great equalizer. Get out there and try it all. The 10-10-10-70, once you learn to live at 70% of what you make, you're also developing discipline. Discipline is one of the key things that you need, especially around finances. As my mentors taught us, money doesn't hang around with people that don't respect it and aren't disciplined enough to say, "I'm going to put this deal together." I realize that I started with nothing. I borrowed money from a private lender to put this deal together. It's not mine. They get back every cent and I have to do that work to get paid. Most people aren't willing to wait to get paid. For those that are, there are amazing things in your future.
Dustin
I'm so glad we covered that because that is so incredibly powerful and you're right, it does take discipline. There's a lot to be learned there. The key quote, and I'm going to paraphrase it, is at some point in your life, you're going to have a financial, was it a hardship?
Doug
You're going to serve a period of financial sacrifice. Thanks for reminding me of that because you can do that when you're young or you can wait and do it when you're old. Our teacher was a great story teacher and he would say it or you can wait until you're old because they got to tell you, "Dustin, there's only one thing that's worse than being old. That's broken old." There's one thing that's even worse than being old and broke? Old, broke and sick. Do you know what’s even worse than that? Being old, broke, sick and ugly. He would follow that up with it. If you serve that period of financial sacrifice now and you do without, you drive that secondhand car. It's not about being the broke mentality. It's doing what you must now until you can do otherwise. It's about not getting into dumb debt now that you're going to have to be paying for, for the rest of your life. It's about, "I’ve got a plan, this is not forever." When Ana and I got married, we moved into the mobile home in the mobile home park. I told her, "Honey, this is only going to be temporary. It's going to be a year." It ended up being eight. It's just like, "I think you're carrying this a little too far.” That another story for another day.
Dustin
It is wise to follow a formula, that principle that you shared. At the same time, it is important to visualize. There is a difference between the Law of Attraction. If I put up a picture of a mansion, it's going to fall in my lap. You do have to take that action. You do have to subscribe to sound financial principles like the 10-10-10-70 Rule. I want to come back to the visualization. You have a background in hypnosis and I know that this is part of the conversation. When someone says hypnosis, they think of the crazy guy or girl on stage, clucking around or training people to cluck around like chickens. It is much more than that. Will you give us a little bit of how this parlays into visualization?
Doug
I didn't come upon this by accident. There was a point where during those eight years, Ana and I were blessed with a couple of children. I was walking out of the bedroom and our youngest daughter had been watching a video with her little friend. The friend said, "Let's go play in your room." My daughter looked at her like, "Room, what do you mean?" The girl is like, "Where do you sleep?" My daughter pointed to the floor where she and her brother were sleeping on sleeping bags. It hit me. It's like have you ever had a moment where you feel like you're letting people that depend on your down? I'm like, "What is wrong with me?" My kids are sleeping on the floor. I had to go outside and hide in the garage so the girls and my wife wouldn't see me crying because I felt like, "What's wrong with me? I own this mobile home park and these other investments and my kids are sleeping on the floor. There's something wrong." Once again, I needed to find answers.
I went to a seminar where we all know the speakers. You and I know speaking and another speaker came and before I went there, I'm like, "I'm going to this seminar. If there are people you need me to meet, make a plan. If there are people I need to stay away from, make that really obvious." Long story short, I ended up being part of a hypnosis show. I watched in amazement when the call to action came and half of that room of 800 people stood up and ran to the back to invest in that seminar. Me leading the way. While I was sitting in that seminar later that year, I got a tap and I'm like, "What?" I leaned over and I told my wife, "I'm going to do that." Within a year, I was teaching that same two-day seminar, which led me to taking classes and becoming a clinical hypnotherapist. Most people think hypnosis is what you said. That person has control over somebody's mind and making them do something. It's totally the opposite.
Dustin
Did that guy hypnotize you to go back and buy or were you in control? Did you know that you were buying? Did the room know? 
Doug
I knew absolutely with certainty what I was doing. Here's the thing. Hypnotist don't hypnotize people per se. We unhypnotize people from the trance that they're already in. Here's what I mean. A lot of people, unfortunately, grow up in situations where they're taught that you're a loser, you'll never amount to anything. I think they develop these stories. “I can't do this fill in the blank because I grew up on the wrong side of the track, because I'm a woman, because I'm a man, because I don't have the right build,” or whatever. That becomes their reality. Imagine somebody that paints a picture and they do it in such a way where you’re all of a sudden, "What? There's another way I could think, another way I could be.” That's what happened that day for me. I came to understand that hypnosis can be explained as one person says something, another person hears it. He believes it and he decides to act as if it's true. What if you're living in a world where you think no one loves you when everybody did? Would you rather be in a world with that or would you choose to believe everyone loves you when not everyone does? Which serves you better? I like the idea of, "Everyone loves me." I start thinking that and people start responding to me differently. Everything begins in thought.
Dustin
Why hypnosis versus therapy versus exploration and reading books and doing a self-process of letting go of the baggage and putting in the good stuff?
Doug
Sometimes that works for folks. For most people, in order to fully access that part of their mind, the subconscious mind, which is like a computer, you need to be able to let go of the conscious mind. We've all had those moments. You referred to as being in a trance or in flow, time goes away and we're into it. Your subconscious mind is taken over. Have you ever gotten into your car, started the car and you're in your driveway and you're shutting off the car? How did you get there? Who was driving? Driving down the interstate and you blow right by your exit. Where were you? What was driving? All of those things that you've learned so well, you don't even need to think about more.
Those are all in your subconscious mind along with all of the programs that tell you who you are, what you can do. Most people are good at knowing what they can't do. That's our job as a hypnotist. We help folks that guide that external perspective that we're not so close to the situation that we can see. It's always great to have an external, that's why coaching works. That's why mentoring works. We’ve been there. We've got the experience and we're the guide. It helps folks uncover what they already know. You already know these things. They need someone to help uncover that. That's what we do. Help them put aside their conscious, the one that tells them, "You can't do that. Who are you to think that you can?" whatever that is. Let that go. Relax. Let's go into your subconscious mind and have a conversation then.
Dustin
Doug, I’ve got to ask you this question because from an outsider reading this, maybe that's learning about hypnosis for the first time. Throughout the show, you've mentioned taps, faith and hypnosis, which seem to be polar opposites and seem to be like oil and vinegar, oil and water. How do you answer the naysayers? How can you be a man of faith and subscribe to hypnotism?
Doug
I have never found it to be at odds with my faith. That's first and foremost. Second of all, the instruction book does say, "Be changed by the renewal of your mind." When I saw that, it's like, "Wow." There was also a saying in there, "I don't have verses memorized." It's like, “Once I saw as a child and now I see differently. Once it was like looking through dark glasses but now I see clearly.” When I read through that, I understand that by simply changing the way we speak to ourselves, the way that we open ourselves up and think about what we want as opposed to the things that we don't want. It changes your life and those taps being open. It's like that intuition. Most cultures say, "The female of the species is more intuitive," because she's more open in an energetic sense. This is energetically speaking. Feminine energy is about receiving and masculine energy is about perusing. By learning how to utilize both, which is available to all of us in different measures, that's the second part. Know what you want, watch for the signs, but then when the sign appears, it's having that open perception to be able to realize, "Is that a sign? Give me a sign that that's a song." 
Dustin
I appreciate that we've covered a ton of ground: real estate, mobile homes, manufactured homes. We've added clarity there. You've talked about a lifestyle of design. We got into hypnosis and we've got to have you back to go deeper into that conversation. I wanted to ask you this. I find it always fascinating how we've known each other for quite some time and I know you know a lot of people and it seems like in life, people come in and out of your life. Like you said, asking for the sign, if there are people I should stay away from, please speak to me now and loudly. I'll sell you in this iteration of my career. I said, "I'm going to bring forth the people that I appreciate." You're one of them. I said all that to say I find it fascinating. I have children now and they're very young. You are about to have an empty nest. You've gone through that. I'm curious to get your perspective and your glimpse into your head of what that's like now being at the other end of that spectrum where the kids are leaving essentially.
Doug
First and foremost, I shared this with you a number of years ago, but your job as a dad, as a parent is to create the most kickass memories you can for your kids. When I heard that and it's like, "Your job, Doug, is to create amazing, awesome memories for your kids." The high eye in me is said, "Yes," because I get to go along. On an eye, that's one of the things that we designed into our lives. You've mentioned freedom is a big part of my world. It's one of my top values. Having designed a life that allows us the freedom to be one of the only parents on the field trip with our kids, to volunteer, to take them on cruises where they get to meet people like you and a lot of the folks we know has been amazing.
I shared with you and I'm not going to lie, it's tough. I have done a lot of self-development and I've worked with a lot of folks helping them transform. I can easily get into that space where I could be breaking down and crying right now. It's such an amazing, thrilling experience to see your kids grow up and become amazing human beings, kind and loving. I'm so excited for them to see where their life is taking them. At the same time, it hurts, they're leaving. We all go through that. It's one of the reasons that I love what I do. I love to be able to share with others. If I can help them transform their lives and share experiences, that's what I'm here for.
Dustin
I appreciate. You've most certainly done that on this show. To folks that want to continue the conversation with Doug, there are so many different ways to work with Doug and Ana. Whether you're interested in the mobile home business, you can do that. If you're interested in some of the hypnosis and having a sounding board with execs teams, entrepreneurs, investors to work on their mindset and help them grow. Rumor has it that you're working on a book, is that right?
Doug
We've done several books. From this point in our lives, we're looking at what works, what we can from our additional experiences, put together to help shorten the curve for others so they can get to where they want to go a lot faster.
Dustin
To reach out, it is available on DougOttersberg.com.
Doug
I'm on Facebook as well.
Dustin
For folks that want to continue the conversation with you in real estate business coaching, life coaching relationships, you definitely know some tools and resources to help people in that. I encourage people to check out DougOttersberg.com. Any final words from you? 
Doug
Everybody that's reading, keep reading this blog. Dustin and crew are doing an amazing job. They've got a lot of things that can help you get to where you want to be. I saw something here that reminded me, it's like you did not wake up now to be mediocre. Take this information, whatever that may be for you. Integrate it, get out there and take action. If I can be a part of that in any way and serve you, please let me know.
Dustin
Thanks, Doug, for coming out this way and being on the show. I appreciate you.

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