Tuesday, November 20, 2018

Why Businesses Fail



Every day, many businesses fail and end up declaring bankruptcy.  In fact, the American Bankruptcy Institute says on average about 25,000+ businesses went bankrupt each year from 2013 to 2017.  The Small Business Association (SBA) reports that 30% of businesses fail during the first two years, 50% during the first five years and 66% during the first 10.  Only 25% make it to 15 years or more.   

We can talk all day about the liquidity and solvency of a business until our pockets bleed, but at the end of the day it’s been my experience that those excuses are the carcasses of the business that is inevitably doomed to fail regardless.

To me it all comes down to businesses’ barriers to entry and how much passion and drive the entrepreneur has in making it happen.  In a prior discussion I talked about testing, testing and re-testing business ideas with a minimal viable product (MVP) in the post How to Start a Business with Minimal Investment.

However, even some of the greatest minds I know who followed the process sometimes fail.  I took a closer look at these individuals over several decades and even reflected on my own personal business failures.  In my opinion, these are the three biggest reasons why people inevitably fail at business

 They Don’t Know What Game They’re In. 

Often a start-up will have early success during their minimum viable product (MVP) stage.  They often get what Alan Greenspan referred to as “irrational exuberance” and scale up very quickly.  The problem is there are often very large barriers to entry that are not seen while focusing on the product or service development.  They can range from a saturated market, complexity of scaling or distribution, and legal, regulatory and trademark issues to name a few. 

I’ll give you a quick example of one of mine.  Around 2012 I purchased a large industrial building for pennies on the dollar in what was to be a quick flip to net a huge profit.  I did my basic due diligence and purchased the property.  It had no environmental, regulatory or zoning issues but also no current occupancy permit.  A few quick repairs and a paint job and I would be in business. 

What followed was years of pure hell in what turned out to be weekly fights with the county and court dates which inevitably ended in a net loss. Code and building violations that existed on every building in the area were ignored but somehow ticketed on mine.  Why, because they were touted as a weak department and decided to go through an image change, starting with me.  Again, when it came to THAT Building and THAT County, I didn’t know the game I was in until it was too late.

For those of you aspiring entrepreneurs, after you have found a business that works for you and want to blow it up, scale according with bare minimum investment and DO YOUR HOMEWORK.  Hire experts, consultants and accountants.  You can never ask too many questions up front or along the way.

Passion and Motivation

Many people go into business because they hate their jobs, financial situation, their lives, etc.…  Also, social media has told them to quit their jobs immediately and pursue their passions.  After all you only have one life to live and time is running out! 

The personal development industry is worth over 13 Billion dollars a year and growing.  It all says the same shit but millions of bloggers and podcasts push the drug in different packages to make a buck.  It all boils down to the same message.

Get off your ass and start working. 

I laugh at the sheer volume of motivational works on social media.  Stop looking at it.  Find a product or service you believe in and get to work.  Don’t quit your job and don’t fuck up your marriage and starve your kids until you know it’s going to work and you’re passionate about it.  I can tell you from experience you will know.  It’s a feeling that overcomes you and once you get the bug, you can’t stop. 

For those of you who are starting a business it sucks.  Being an entrepreneur is lonely, stressful and I guarantee most of those who ventured out on their own wish they wouldn’t have over the first year or two.  But this is the reason the business fails.  You’re not motivated or passionate about the work.

Capital, Liquidity, and Cash Flow

I hate this one the most because in my fantasy world I believe if you listen to me and do all of the homework upfront and scale properly, Capital, Liquidity, and Cash Flow should not be a problem. 

However, it doesn’t always work that way and each is relatively important.  My suggestion is that after you have a product or service that you are truly passionate about do a shit ton of homework on scaling.  Be conservative and throw in a few pitfalls or percentage for unforeseen costs.

Line up capital for immediate needs but also formalize a strategy for future needs.  Most importantly know when to STOP.  If things go bad don’t be so leveraged that it destroys your life.  In my decades of experience this is one of the biggest reasons people fail or succeed. 

Those successful entrepreneurs had many failures first, but they knew when to stop the bleeding early, cut their losses and move on to the next project.  Those who couldn’t let go and felt trapped, ended up draining every asset until it was all gone.  There’s no shame in failing, as a matter of fact it’s necessary.  But have enough skin and emotional fuel left to move on to the next project.


Good Luck…


Sunday, September 9, 2018

How to Invest in Sports Memorabilia

Sports memorabilia has been on fire with some prices for select athletes going through the roof.  Often this phenomenon is related to the health of the economy however memorabilia often outperforms the market in a recession.  Don’t be fooled though, it takes a lot of hard work and research to be successful, as investing in the right items is essential to getting the best return on your investment.

I personally own millions of dollars of sports collectables and memorabilia and have been investing consistently since the 80’s.  I have also lost a ton of money in this hobby along the way.  For example, I purchased many complete baseball card sets and unopened wax boxes in the 80’s, which are nearly worthless today. 

Looking back I should have invested all of that money in one or two single cards like a Mickey Mantle Rookie or early edition Ty Cobb or Babe Ruth.  Not only would they have made me a fortune but I would have saved a ton of space in my house.  

Like so many entrepreneurs I don’t like to dwell on the past but rather learn from my mistakes.  As I look back I realized that everything I purchased was on instinct.  No rhyme or reason for the purchases, rather an assumption that more is better and that everything  would always go up in value.

With the advent of authentication and grading, statistical analysis has become a valuable tool in analyzing investment opportunities.  Today, I never make a purchase without applying analytics and establishing a current and potential future value. 

PSA/DNA is a professional authentication and grading service primarily used for sports memorabilia.  They are the industry standard and probably cover 98% of my collection.  In this day and age of fraud and forgery, the need for authentication is essential and most items of any significant value will not sell without it.   For more detail go the website at  www.psacard.com

Additionally, grading is essential to applying any type of analytics as it is impossible to determine value or potential value if the condition of the memorabilia or card is subjective.

The biggest challenge is not running the analytics but capturing historical data.  Ebay only provides a couple months of sales so collecting sales over multiple years can be challenging.  I use a few popular auction sites that provide this type of data.     

Although we use a variety of statistical tools that can be rather complex in nature, today I want to give you a basic example of ones that can easily be applied with a little effort. 

We will be analyzing the 1986 Fleer Michael Jordan Rookie Card.  I will be applying a simple method called Regression Analysis which is widely used for prediction and forecasting.  In the following examples is shows the simple relationship of value over time for four different grades. 

I ran the analysis on Microsoft Excel which is likely the most common spread sheet amongst the masses.  Here is a basic youtube how to video.  https://m.youtube.com/watch?v=Cltt47Ah3Q4


The first analysis is for the Grade 7.  Here you can see the trend line is heading up nicely.  The R2 tells us how close the trend line relates to the data.  A score of 1.00 is perfect so the higher the better.  In this case .76 is pretty good so we can believe that the trend line reasonably fits the current data and will be a reasonable prediction of the value going forward.  



So this indicates that I would expect to pay an average of $1,372 for one of these cards in September 2018 and that the card has gone up in value over 340% over the last 11 years.  Not a bad investment. 

Now lets look at grades 8-10. 

Grade 8 has almost an identical return on investment to Grade 7 with almost an identical trend line fit.   Expected average value in September 2018 is $1,921. 

The Jordan Grade 9 Rookie is an entirely different story.  Although the trend line correlation is not as strong as the Grade 7 and 8, it is still good.  However, the Grade 9 has been a much better investment over the past 11 years with over a 460% return on investment.  This far exceeds the Grade 7 and 8.

The Grade 10 analysis has many concerns.  First of all there is not a lot of data to do a good analysis of this grade.  Second, the R2 value is much lower than the others indicating a lot of variability in sales price and therefore a poor predictor of current and future values.  Second, if you look at the history it shows a lower return on investment of just over 180% over 11 years. 

In summary, running a brief analysis of these potential investments has revealed a lot.  First, three out of the four have returned excellent and consistent profits over the last decade and predict further solid returns going forward.  Second, the Grade 10 is very high priced, highly variable in price, and has a lower return on investment on a percentage basis.  I would stay away from it.  Lastly, the diamond in the lot is the Grade 9 as it has returned significantly better profits than all the others.

I will be buying Fleer Jordan Grade 9 Rookies only….



Copyright MrWallStreet.com 2018

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Thursday, August 9, 2018

How to Vacation. Punta Cana Style!

First I would like to apologize to the MrWallStreet.com army for missing my post last week.  The truth is that I was on vacation in Punta Cana, Dominican Republic and the wife wouldn’t let me touch a computer.  Having said that I’m going to dedicate this week’s blog to my experience and general thoughts on the way successful people vacation. 


Getting away is one of the most important components for my success.  I decompress, relax but most importantly I think freely.  Part of my brain takes me to places which promote deep thought, create innovation and develop visions beyond the capacity of what I can do on a normal business day. 


My vacations are generally higher end, secluded and private.  This is because I generally deal with people all week, and although I enjoy it, I need to unplug and capture some privacy.   I also don’t want to deal with the drunk assholes at the pool bar. 


My advice to you is to find an agent that deals with this type of travel.  If good, they’re not always easy to find and expensive, but once you discover these hideaways you would inevitably have paid them double because it was so awesome.  Some of the best locations for this are in places like Peru, Belize, Seychelles, and Vietnam.


Now back to my trip.  We planned last minute and had a difficult time locking down our typical destination and my wife somehow convinced me to go to the Iberostar Grand Resort.  This is generally known as a high end resort if not the best in Punta Cana.


Although I absolutely loath chain resorts I have to admit that the place was pretty kick ass.  Since it’s off-season it was not crowded the service was excellent.  I probably smoked over 20 cigars during the week with a decent lounge and good selection.   The food was pretty high quality, consistent with a very diverse selection.  I still recommend finding your secluded get away but for at least half the price, I’m going to go out on a limb and give the Iberostar Grand solid thumbs up.


However, this is not a f*%ing vacation blog. 


I wouldn’t try to convince you go on a trip to a themed resort because I want you to enjoy yourself.  My goal in life is to make you money.  Therefore, I want to discuss the importance of networking.

Like I mentioned, when I’m on vacation I want to be left the hell alone.  Given this situation, it was nearly impossible to avoid drinking way too many “dirty monkeys” and not socializing.  Although my Rolodex is full (those are contacts for you damn millennials), I met a ton of people and got most of their numbers. 


For most of us, we can tell which ones are full of shit and need to toss their business card, but for others it can really lead to a long term relationship which may eventually lead to a business relationship.  I met a film producer from Toronto who I hope can help my daughter in the business, and a real estate developer from Washington which has a couple of projects I am interested in.  I’ll be reaching out to both of them this week. 


"Fortune" recently reported on a study that claims networking was essential in 78% of Start-ups.

Finally, I know we all love our kids, but I think to truly relax and meet some solid contacts you need to go to an all adult resort.  Also, go as high end as you can afford.  The difference between the resort I stayed at and the one next door was probably a couple grand.  However, it’s a guarantee that you will meet far more business and investor minded people at a pricier resort.   Fly coach instead of first class and put the money into the resort.  That my friend is a good return on investment. 

Bon Voyage!

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Copyright 2018 MrWallStreet.com

Wednesday, July 25, 2018

How To Buy Property for Unpaid Taxes

Property Tax Lien investing is often advertised as a high income, passive investment that anyone can do.  Conduct a few hours of research and show up at the county auction and earn unlimited passive income.  Well, that’s complete bullshit. 

I’m sure you have seen books and courses on television touting the unlimited wealth you can generate for very little work.  The fact is that there are better and more ethical ways to make money on property through unpaid property taxes.

First I’d like to explain why I do not bother with purchasing tax liens. Only about 6 percent of delinquent tax liens end up in foreclosure, and of those, only one half of one percent is successful in that they are not redeemed (before foreclosure is complete).  That’s because most properties have liens and the taxes will eventually be paid by the lien holder.  Additionally there can be a ton of fees and if you are in the rare position of acquiring one of these properties, you are basically stealing it from the owner and evicting them as a final f#*K You.

I just can’t do it.

In the event that you find a property that has no lien, there will likely be so much competition for the property, if it has any true value, that the bidding will take down the interest rate to below an acceptable investment return.  Not to mention that you will likely be pitted against law firms and other sharks that have done a ton of due diligence.  It Sucks, and is not for the faint at heart. 

My approach is somewhat different, but it has allowed me to purchase many valuable properties over the years.  It can be a grind at times, but it also doesn’t screw the current owner out of their bounty.


There are over $14 Billion in unpaid property taxes every year and it is all public information.  They’re easy to find and once you learn the most efficient way to review them you can literally look through hundreds in an hour.  My favorite way is using a GIS viewer as I can probably look at over 400 properties in an hour which includes any lienholders.  I compile a list of all properties with unpaid taxes over multiple installments and begin to prioritize them by value. 


Value can mean a lot of things to a lot of people.  It could be proximity to another business, zoning, or ability to combine with another property in the future.  At the end of the day it’s still location, location, location. 


Let me give you an example of a plot of land I acquired using this technique.   The attached picture is an aerial view of multiple properties I acquired over approximately one year.  During a standard search I found close to 50 properties whose taxes were unpaid.  I prioritized them and this one floated to the top of my list (Property #2).  Why?  Because it was on a busy street, the neighbor has commercial zoning, and although it is small and difficult to develop, it has several opportunities to potentially combine with neighboring parcels.

I approached the owner to see if he was interested in selling.  The owner is paying a ridiculous amount in penalties every month from the unpaid back taxes which generally mean that he is in some type of financial trouble and is likely willing to listen to an offer.   This is the biggest difference with my approach.   The owner doesn’t get screwed.


But before I committed to the deal I quickly did research on the surrounding lots.  Property #1 was completely worthless.  Garbage!  It was landlocked by other properties and oddly shaped and therefore could not be developed on its own.  However, when combined with Property #2 it became very valuable.  I did a little research on it and discovered that the county owned it for unpaid taxes.  The property was so bad that a tax lien was never purchased against it.  It was going to be sold at a deed auction in the fall of that year.



At this point it was worth making a deal with the owner of Property #2 given the great price, location, and knowing I would be able to acquire the adjacent land within 6 months.  So I purchased the property for an unbelievable price and immediately paid the back taxes owed. 

Now, while waiting for the tax deed sale on Property #1 I did some research on Property #3.  As you can see in the picture it was an abandoned alley and easement.   Both can be acquired through the county with appropriate justification using a “Petition to Vacate” application.  I have attached an example petition from Cape Coral, Florida.  I have gone through this process myself many times, but I would highly recommend using an attorney.


I hired an attorney to complete the process and within a year was granted both the easement and the vacated alley.  In the mean time I purchased Property #1 at the deed auction for the opening bid, as I was the only bidder.  Now I have acquired this large plot of land for almost nothing but some hard work and well planned strategy! 

While in the process of combining the PIN numbers and applying to re-zone the property, the adjacent property owner made me an offer I could not refuse.  He had a commercial building and needed the land for expansion.  When the dust settled I made over 10X my original investment! 

I know you thinking this is once in a lifetime thing, but it’s not.  It happens all the time.  There are a lot of people in financial trouble which is indicative of their unpaid property taxes.  Many of which would be delighted to get an offer to unload the property and not have to worry about coming up with cash to pay the taxes.   

  Copyright 2018 MrWallStreet.com

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Wednesday, July 18, 2018

How To Start a Business With Minimal Investment

My brother in law had a great idea.  Hell, everyone has a million dollar idea.  My mother in law has four, my barber has at least ten, and the guy that details my car begs me to invest in one of his many. 

Ideas don’t matter, they’re everywhere. 

The daunting and excruciating process of bringing an idea to a viable, profitable product or service is where all of the value is.  And that’s why so many people fail.  Because they don’t have the knowledge, patience, and drive to execute.  They don’t have the chops to get up and work through the pain and rejection every day to make it work.  They ultimately give up! 

Now back to my brother in law.  He had a million dollar idea.  Had no idea if anyone would buy it, but convinced himself that people would beg for his product and pay whatever he wanted, because he liked it.  He had no prior experience but somehow convinced his wife to pony up the 401K and credit cards to chase the dream.

And I’m sure you don’t have to be a rocket scientist to guess what happened next.  That’s because I guarantee you know someone that went through a similar process. 

Having no start up or project management experience, spending on the dream went out of control.  He started having some doubts about the sales forecast after obtaining some unfortunate information.  This was due diligence he should have done prior to starting.  His wife was freaking out because it had become a make or break situation for their future.  The fear and pressure was so insurmountable that he was hospitalized after a nervous breakdown.  And then they just stopped! 

I don’t think he has ever been so relieved over anything in his life.  He lost his house, wife and 401K and filed bankruptcy, but he was now a free man.  How did a dream turn into a prison sentence? 

The reason I am writing this blog today is because this all could have been easily avoided.  My favorite read that outlines the process of a proper start up once you are convinced of your million dollar idea is the “Lean Start Up” by   Eric Reis.

I’m sure most of you have heard of the book but if not, spend the 20 bucks and save your ass.  I won’t go into too many details but the two most important take-aways for me were the Minimum Viable Product and the Continuous Feedback Loop.   

The Minimum Viable Product (MVP) is the process of building the bare minimum product or service to test the market.  Hell, in some cases the MVP could be nothing but a phone call or sales pitch to see if anyone is interested.  If executed properly this should give you enough feedback to build the most basic model and that concept should be designed with as little capital as possible until interest and momentum can be built.

I have built several MVP’s over the years that gave me enough information to decide whether the idea had legs or not.  Some so ridiculous and aesthetically embarrassing that I don’t want to mention.  But guess what, they worked!  80% of them sucked but I had so little invested that dumping them was Ok.  The other 20% did well and 5% did great! 

Once your MVP has been established proceed to your continuous feedback loop of Building – Measuring – Learning.  This allows you to make adjustments and build upon your product INCREMENTALLY through continuous feedback.   If the model is working well, build on it.  If it’s working but not great make subtle changes, measure those changes and continue to adjust or pivot all together. 

Simply put, this process allows you to bring your idea to the market without going broke.  In other words, LEAN!  I’ve left out a ton of shit, so again, please spend the 20 bucks and read the book before you taking money out of your 401k.  Hopefully the wife will stick around too.

See more innovative and life changing ideas at MrWallStreet.com

Copyright MrWallStreet.com 2018



Monday, July 9, 2018

How to invest in parking spaces


Investing in parking spaces is not for the faint of heart, but in several situations can produce excellent returns.  The reason I loved it was because there wasn’t the hassles of renting an residential space.


Do your homework up front as if you were purchasing an investment property. 

Calculate your annual gross rental yield and compare it to the risk free rate.  I always like to see a yield of above 12%.  Calculate the CAP rate and P/E ratio.  CAP has to be above 8% to make it worth my time.  This is nothing new for the seasoned real estate investor. 

The most important thing is comps.  How desperate are people for spaces and how much are they willing to pay.  It doesn’t take much effort to figure this out, however it is essential.  Get your ass out there and look for spaces to rent.  See how difficult it is to pick one up.  If its easy and people are willing to negotiate, find another area.  This is where the money is made so don't be lazy.  SpotHero and SPACER are great resources to provide data and comps.

Income first, appreciation second.  However, appreciation can take off in certain scenarios especially around new developments.  It doesn't hurt to spend some time at the county building and find out what the parking allotment around new developments and do a little math with existing demographics.

Parking spaces have many complexities.  They are often deeded with condos, there can be several restrictions and you cannot get a mortgage for them. It's a cash game unless you want to embark on some P2P lending.  It’s these same difficulties that that make these investments interesting since they keep most investors away.

From the NY times:  Marc Wisotsky and his partner, Jackie Lew, bought two spaces in 2005 in a parking garage near their home in Park Slope, Brooklyn, for around $45,000 each. They used one and rented out the other for $600 a month, pocketing $310 after taxes and the garage fee.  It was a tidy, reliable income, Mr. Wisotsky said, but the real payoff came when he and Ms. Lew sold their extra space last year for $285,000. “We could have gotten more — the prices just keep going up and up,” he said. “There are never as many parking spaces as residential units being built.”

Check out this ridiculous story.  Makes me want to get back in the game! 


Monday, June 18, 2018

How to Improve your executive presence. An Image Must Have!

Just spent another $4K on my teeth.  It doesn't make sense to wear $5K suits and $45K watches if you teeth are jacked!  Don't be a yuck mouth, get your shit fixed! 

I can’t overstate the importance of great teeth.  When in negotiations or business deals it is imperative to show strength and confidence and believe it or not there is no better way than a big bright perfect smile. 

Tons of studies have been done to prove this and I couldn’t agree more.  On both sides of the negotiation, people can focus on bad teeth while negotiating with you or you can feel inferior because you’re thinking about your yuck mouth when you should be focused on kicking this guy’s ass and getting a better deal. 

I have spent a fortune on my teeth, but I know guys that have over $40K in their mouths just on cosmetics.  Some said they would spend double if necessary. 

A Kelton Global study found that people attach positive attributes like success, wealth, happiness, and intelligence to those with straight teeth. 

“Since the perception of a facial appearance can affect health, social behavior, and happiness of the individual, it is safe to say that people with well-balanced smiles are considered more intelligent and have a greater chance of success” 

So before you buy the jewelry or top end suit get your snaggle tooth fixed first! 




Why Businesses Fail

        Every day, many businesses fail and end up declaring bankruptcy.   In fact, the American Bankruptcy Institute says on...