Peter is a libertarian and a capitalist. He believes that transactions which you can be proud of result from carefully conceived goals and plans followed by purposeful actions and scrupulous documentation.
Upon graduating from high school in 1965, Peter went right into the real estate business. His motivation was his desire to be self-employed until he could afford to be unemployed.
Pete says “Everyone who knew me believed that I was unemployable. They were right. I still am!”
Peter was excited about being free to build his business and his future. He attended seminars and read at every opportunity. He sought out and learned from many mentors and benefited from the example and counsel of his father who always encouraged and supported him.
Pete finished college with a clientele and an investment portfolio. By 1975 his investment income had eliminated his need for fees from clients to fund his lifestyle.
Peter continues to teach and to attend real estate and investment seminars and meetings regularly. He is respected for his clear and patient explanations of investment concepts and
transactions. He has been building, structuring, manipulating and managing investment transactions and portfolios for more than 45 years.
Episode Notes:
Narrator This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever -changing real estate market hosted by author, investor and hard money lender, Bruce Norris.
Bruce Norris Thanks for joining us. My name is Bruce Norris. Today we have a very special guest Peter Fortunato. Peter is a libertarian and a capitalist. He believes that transactions which you can be proud of result from carefully conceived goals and plans followed by purposeful actions and scrupulous documentation. Upon graduating from high school in 1965, Peter went right into the real estate business. His motivation was his desire to be self-employed until he could afford to be unemployed. Peter says “Everyone who knew me believed that I was unemployable. They were right. I still am!” Peter was excited about being free to build his business and his future. He attended seminars and read at every opportunity. He sought out and learned from many mentors and benefited from the example and counsel of his father who always encouraged and supported him. Pete finished college with a clientele and an investment portfolio. By 1975 his investment income had eliminated his need for fees from clients to fund his lifestyle. Peter continues to teach and to attend real estate and investment seminars and meetings regularly. He is respected for his clear and patient explanations of investment concepts and transactions. He has been building, structuring, manipulating and managing investment transactions and portfolios for more than 45 years. And in 2017, you received the Rohny Award, which I consider the top prize in our, in our training industry, because we don’t give them away that, that means somebody has got character for a long time. So Peter, thank you so much for joining us.
Peter Fortunato Thank you, Bruce.
Bruce Norris I’m interested in understand what is the definition, your definition of being a capitalist?
Peter Fortunato A capitalist, a person who is free and enjoys helping other people.
Bruce Norris All right, that’s very simple. I like that.
Peter Fortunato One of the things I get all the time is the strange people, especially from states, like Massachusetts, and California, think that somehow capitalism, and capitalists have a negative context. And they don’t recognize that in a free society, people always give better than they take from other people. And that’s what capitalists do all the time. When I do a deal, and I give somebody something, whatever it is, they chose, without coercion to take that something because they liked it better than what they gave up. And it’s that free to help others that makes capitalism such a wonderful thing for all of us to enjoy, and to better ourselves with.
Bruce Norris What’s great about what you just said to is, and someone from my perspective, understands that maybe better than most is when you sit across from somebody, there’s 10,000 other transactions and conversations that occurred, that you get this plant into this one. So, you’re not shooting from the hip. This has been replayed, but you’re trying to get specific information from them. So, you can bombard it with solution. But if you didn’t have that experience, there wouldn’t be any way to do it.
Peter Fortunato Well, I think if I didn’t care enough to find out what was going on in their life, Warren Harding taught us always seek out the uncomfortable circumstance that is causing their property to be available. And the uncomfortable circumstances, you know, never know walking in what that is.
Bruce Norris Right.
Peter Fortunato The job, is to to help them better themselves.
Bruce Norris Well, when you get somebody to say that, and I understand what you’re talking about, that’s accomplished, because somehow you have become safe to that person. There’s a trust level where they’ll actually share the truth with their circumstance, then you can provide a solution that makes sense.
Peter Fortunato Yeah. Well, I start always by saying, why would you sell a nice house like this? I shut up and listen and find out about they just had twins. The doctor said they can’t handle the stairs. They want to move back to family up north, whatever it might be.
Bruce Norris But that’s the path. Oh, yeah. Without that path, you’re shooting in the dark. That’s, that’s a great, it’s a great way to approach the business. And it’s very rewarding. I listened to you. You had a presentation that’s on on your website. I listened to for quite a while today. And it was, it was great, because there’s concepts in there that are really important. And one of the things that you talk about is recruiting allies.
Peter Fortunato Yeah.
Bruce Norris So, you know, talk about that concept just a little bit.
Peter Fortunato Every single time you do anything. You’re recruiting an ally because if you buy a house from someone, you’ve just helped them. If you sell a house to someone you’ve helped them, if you rent a house to someone, you’ve helped them, those people, if you stay in contact with them, would like to help you as well. And so recruiting those allies is very important. I just borrowed $150,000, from one of my tenants who called me because she had $180,000 in the bank paying her 1/10 of 1%.
Bruce Norris Right.
Peter Fortunato And I told her, I would double that for her.
Bruce Norris That’s funny. And you put that in a, in what a trust deed of some kind, or…?
Peter Fortunato When, I went bought, bought a house, I’m sorry, I bought a house and I refinance a house. So, I paid her 6% interest only for 15 years, I made that promise.
Bruce Norris Right.
Peter Fortunato I took that 6% money, paid off a 9% note that I owed that had a 10% constant on it. So, increase my cash flow in that and bought a house with $25,000, down and seller carry at 4%, which is producing more cash flow for me in amortizing $200 a month.
Bruce Norris I think you might be, certainly one of the few people in the country, that when I listen to your seminars, I have to re listen to them. Because they’re, they’re simple, but they’re complicated. There’s a lot to it, you know, and, and that’s a compliment and other words, and I think that you have, that’s what’s fun about listening to you because every time you listen to you, it’s different. Because there’s new transactions, or there’s different thoughts that come into your head that are applicable to the, today. So, I you just one of the you’re really one of the best teachers I’ve ever heard. And it’s fun listening to.
Peter Fortunato Well, thank you, I tell you, it’s important to me, because I get such a thrill from the people who come back in rewards that you feel when you realize you’ve made a difference in someone’s life.
Bruce Norris Yeah, I absolutely agree with that concept. When somebody asked me to speak in Florida, you know, they want to do an all day seminar, I said, you know, I really want to do that. But I’ll do half a day if you could get paid to do the other half. And so we got to teach together. And that was great fun. I hope, I hope we get to do that again.
Joey Romero Bruce can ask a question.
Bruce Norris Yeah, go ahead.
Joey Romero So, Pete, you know, I was looking at the flyer that you, that you had for last year’s presentation that you did at the end of the year. And one of the things that stuck out to me and of all the bullet points that they teach is expand your market by using promises. That was interesting to me. Can, can you talk about what what you mean by that?
Peter Fortunato Well, that when I got out of high school, some of you guys will remember when you had zero net worth. You know, John, John always said, you remember when our net worth was in our gas tank. And I always tell John, I didn’t have a gas tank. But what happened is my goal when I got when I was still in high school was to get enough assets to fund my lifestyle. I didn’t have any money. I didn’t have any capital. I didn’t have any goods and services to trade. But I should trade promises. And so that’s what I did. I promised to pay $500 a month, I promise to pay $100,000 I sell my house, I promise. So, my first house, I bought subject to a first and a second mortgage. I promised to protect the guy’s credit and enabled him to move to Fort Lauderdale from Boston. The second house was a lady who wanted to do an installment sale, I promised to pay her $1,500 a month. I made a deal this past Thursday, where I promised $20,000 when I sell a house and 30,000 cash now. I don’t have 30,000 cash, even to this day at age 75 I still haven’t saved that much money for investing until I called a friend who’s IRA, lent me the money. So, that provided the money so the promise to the IRA got me the cash needed for the deal. The promise to the people got me the house, the promise to rent a nice house to a tenant. And they promised to me to pay me rent for the use of that house is going to pay me so I can pay them. And so my houses that were bought primarily with promises and that’s why when I got out of college, I had 20 rentals now not 20 properties or six properties, but 20 rent incomes coming in all of them acquired with promises.
Joey Romero So, it’s, it’s not necessarily like a promise where it’s not backed up by a contract or anything like that. It’s just, you know, that’s, that’s your, your esoteric kind of way of looking at it like, my contract is my promise.
Peter Fortunato Exactly your and the promise is something we can all give. Now you need to make the people. There’s, as Bruce was saying that people need to feel that they can trust you, or it’s not enough to be trusted, you need to be both trustworthy and competent. I had a young, it was eight. So, a young woman who, whose dad had been reading Richest Man in Babylon to her, you know, one round chapter every day is a bedtime story, the individual chapters in Richest Man in Babylon are spectacular.
Bruce Norris Absolutely.
Peter Fortunato And this little girl came to me and she said, you know, Mr. Fortunato, yesterday, you were talking about trustworthy and confident. And when my dad was reading the hero in that, took his money, and did a joint venture with his friend, the bricklayer to invest in gemstones. The bricklayer was completely trustworthy, but just like, ‘What does he know about gemstones?’
Bruce Norris Right.
Peter Fortunato He that’s eight and they understand that he just got to talk to people and care about people and know how to make a deal.
Bruce Norris Yeah, that’s very cool. You know, Jim Rohn was my, my favorite mentor, you have, did you have a favorite mentor, let’s say both in real estate, and then outside of real estate?
Peter Fortunato Is so so very many.
Bruce Norris Really.
Peter Fortunato I mean, I was blessed. My dad was an extraordinary people person. But when he would talk to people, he was gentler than me. And so when he would say, what can you do in a blue bathroom, you can’t do in a pink bathroom. The people laughed and still bought a house from him, they fired me when I sat down. I remember things like watching him, when some guys converted some of the downtown buildings in Beverly, Massachusetts into condominiums on the first floor. And then and they were selling out those little retail spaces. And when we heard about it, my dad said, ‘Gee, I think I’ll go get a haircut,’ he went down and got a haircut and came back with a contract where he sold the barber, a commercial condo, so the barber was no longer resident. And so, that immediately of taking action and of caring about the people and putting the people together with the benefits was tremendous for me. I mean, you know, how important Jack Miller was to me and Warren Harding, and John Schaub and just extraordinary friends who I’ve done business with. And those are the allies that developed out of doing business and helping one another. Jimmy Napier used to talk about us going, doing a co-venture at the free meetings, and what we call venturing back in the early 70s was one of us would bring peanut butter, one would bring jelly, the other bring a loaf of bread and we fed them ourselves, everybody at the meetings.
Bruce Norris It’s very special, you know, and it’s very, very cool. And the amount of, the number of people that you’ve impacted, it’s been exciting to see, even on the West Coast, you know, and that’s one of the reasons why I felt compelled to give you guys that award, because it was equivalent excitement on the west coast for what you guys shared with people. And that’s, that’s pretty cool.
Peter Fortunato It was remarkable.
Bruce Norris You know, you know what, you know, what’s interesting is sometimes the path is very different. I didn’t get introduced to real estate investing, until one night when I was like 28 years old. I mean, it really, it didn’t occur to me what that tool was, and I also never took the first real estate seminar I took I gave now that’s and that’s really a mistake, by the way.
Peter Fortunato Yes.
Bruce Norris You know, that’s why I happened to make some of the mistakes I did, because I didn’t, I didn’t trust the education world of the real estate. And the reason that was my brother, Dwight used to buy those seminars that were, you know, run to the back of the room type stuff, and I would listen to him once in a while. And I remember saying to him, I said honestly, I don’t think this guy’s bought a house in his life. Because it’s just not how it works, you know? And that’s it made me suspicious. Until you know, the first real estate seminar I took. This is funny, and I’m going to talk about this transaction. I had a chance to buy 50 building lots, but I was $2 million shy of the $2 million price tag. So, I took a seminar from the gentleman that you just mentioned it just uhm..
Peter Fortunato Jack Miller?
Bruce Norris Jack Miller for options, but it was so far over my head, I had no idea what to do. And I left. And I went back with it. So, anyway, I’ll finish that story tomorrow, but…
Peter Fortunato By the way, I have Jack Miller’s first options, presentation, the booklet from 1977 is five pages, including the cover page.
Bruce Norris Well, he doesn’t need a booklet to go see Tour de. What’s what’s funny is oh, he also doesn’t have to follow his outline.
Peter Fortunato And never does.
Bruce Norris And never does, and see that was for me. I was trying to get a boiler plate. What do I take from here to go over there?
Peter Fortunato It was over my shoulder, that entire shelf was Jack moves, options classes.
Bruce Norris Oh, my gosh. That’s pretty cool. Well, together, you know, it’s been it’s been fun. Well, Jack Fullerton, you know, that’s he, he and I met at a Jim Rohn. We didn’t meet but we were, we were at the same Jim Rohn seminar, oddly enough, and had a big impact. And he was the one that had me first speak at an investment club. And it was the last thing on my list. I mean, honestly, what that was an accidental transaction we had met. At his, at his meeting, he had a guy talking about a mobile home, how to do mobile homes, and I had just traded for six mobile home lots and I didn’t have a clue. So, I went to the club meeting for the first time in my life. And he opened the meeting saying anybody that says they can buy properties cheap enough to flip them immediately in California is lying. And I thought, wow, that’s what I do. And I thought he’d be happy to know that. So, anyway, that’s how…
Peter Fortunato He actually mention that to me many times.
Bruce Norris It’s funny, you know, but I like that there’s different paths to where I could, you, you’ve always been involved in real estate. I mean, you know, when you were a realtor, too, I, see I had no patience for that. I just, I, we were, I was a buyer for a company. And I had to have a license for that. But we bought too many properties. He says, Okay, well, I need you to sell some. So, I took one couple out one time my entire life, two kids in the back that were noisy. There were five houses that kind of match what they wanted. And at the end of that this is a Friday night, she says okay, when do we come, what we do tomorrow, and I said, I don’t work on the weekends, if you don’t, if you didn’t see what you wanted out of the five houses, I don’t have it. So, they went to the car, they came back and said, We’ll take number four, and that was my close. And I just thought I don’t want to do that anymore. But you took a path where that was actually really beneficial because you talked about what you learned by putting transactions together by these agents. And that’s that was interesting to me.
Peter Fortunato The agents in Gregor Salem, Massachusetts Board of Realtors, when I went into real estate in ’65, they were just extraordinary.
Bruce Norris Wow.
Peter Fortunato Everyone was helpful. Everyone was encouraging. It was amazing. The friends and the allies that I built there.
Bruce Norris That’s a great word. But when you were, you were learning, you were learning to put transactions together. And then you made a conversion when you realized that somebody that was going to buy more than one might be your best customer base.
Peter Fortunato Yeah, my dad was it was, as I said, a great people person. So, people would buy a home from him. And then a generation later, their kids would come back or they would come back to a smaller home and do it again. And I was 19. I’m saying I’m not waiting 20 years for the next sale. So, I went to investors, I could do two or three deals a year with investors wanting to buying some property.
Bruce Norris That’s a, now, do you still have your investor? I don’t know what the meeting where you’re trading things. Do you still…Okay.
Peter Fortunato That’s where I made the deal with $20,000 promise and the 30,000 in cash that I didn’t have those in exchanges on Thursday.
Bruce Norris Yeah, I’ve got to make it happen to go into your meetings. I just I haven’t done it.
Peter Fortunato Last night. I started Monday night meeting. We’ve got a waterfront property on a park here, which is just exploding in value, as you can imagine, are in price as you can imagine. And my son lived there and he has now moved from it. So, so, we want to trade that property.
Bruce Norris What city is in it?
Peter Fortunato It’s in Southie St. P. And we want to trade that property for three nice rental houses. Because Michael has now moved to a nice out where he’s happy and having the three incomes still in good neighborhoods.
Bruce Norris Yeah.
Peter Fortunato Works for us. That’s what we do when we would never take the money and stop.
Bruce Norris Where’s, what’s the value of the of the house?
Peter Fortunato Well, I thought 600,000 and turned out 995.
Bruce Norris You’re only four grand, but…
Peter Fortunato I’ll be wrong by 67%. But what that…
Bruce Norris Last, last time you look was about three months ago.
Peter Fortunato Yeah, it was our tenants are the rest… But I realized that the income the dollar is being destroyed, and it’s melting like ice in terms of its buying power. But on the house down by lasting parks, I was just talking about Michael rented the one bedroom ADU in the back to a gentleman his 80s for $1,600 a month in the guy does the lawn. And I don’t have a single three bedroom, two bath house that’s rendered for more than that, that one bedroom, one bath house is rented for now, because I’m that far behind the eight…
Bruce Norris Yeah.
Peter Fortunato Great tenants for a long time.
Bruce Norris Yeah. Well, that’s, you know, that’s interesting. You know, years ago, I went, I mean, a long time ago, somebody gave me a break when I was trying to save for a house. And they didn’t raise my rent in Orange County for two, two years. And it was a big deal. And I got to save a little $20 here and there, got up to 500 bucks got to buy a house and I never forgot that. So, for probably the first. I don’t know, 25 years, we’ll be having rentals. I never raised rent. I have the same tenants. They were good. I just kept them. And uhh…
Peter Fortunato I don’t mind helping them that way. But if they move, I feel great. I want them to stay there. At least a lifetime.
Bruce Norris At least in the lifetime.
Peter Fortunato Because I always would say to people when I’m trying to rent a house. No, I’m looking for long term tenants. And just a few years ago, the long term short term difference was people want to stay a year while it builds the house they want to stay at 18 years. And the long term one to stay decades. Today when I say long term, they mean more than a weekend because they’re all Airbnb people.
Bruce Norris Oh, wow.
Peter Fortunato And let me see. I’m not going near those people.
Bruce Norris No, no, I agree with you. I want to have I want to have a relationship. And even with a property management company, and I think you probably you manage your own properties?
Peter Fortunato I manage out to 15 miles and then I hire somebody or I do a sandwich lease with somebody who will actually travel that far.
Bruce Norris Okay. Yeah, well, I’ve never, I’ve never managed the properties. I’ve always been very meticulous about getting the right property manager. And I’ve been very fortunate. But I know that, that’s a big problem if you get the wrong one. Especially from a distance. You know, I’ve had rental sometimes from California to Florida. If you don’t have the right person, that’s a total disaster.
Peter Fortunato Oh, yeah, I was at the Bradenton meeting, the lunch meeting in Bradenton, and there was a lady there who had 12 houses she retired. And the 12 rental houses were all within two and a half miles of her home. I was so jealous, but a time I…
Bruce Norris Just want to buy her home in a rent shot.
Peter Fortunato What a portfolio, G.
Bruce Norris Oh, I thought you were going to tell me there was a problem. No, that was good. I’d love you free to tell yours the story, you know, because I always get a kick, by the way, when, when you were really young. Did you do entrepreneurial things that were unusual?
Peter Fortunato Oh, yeah. I mean, I’ve there’s nothing better than a snowstorm when they said don’t send the kids to school because it’s too dangerous to be out. And I would go out and make 20 bucks in the afternoon shoveling snow. And then I found out that some of my friends and my younger brother would do the shoveling.
Bruce Norris That’s exactly what I wanted to know. Oh, yeah. I you know what, when? You know, when you talk to other people, you know, I’ve had the privilege of being interviewed. I decided to ask that question, because I was just curious. And I almost every time yeah, there’s some six year old doing something. You just go. Where did that come from? That’s unbelievable.
Peter Fortunato Yeah, no, my sister at one point had the record for the most Girl Scout Cookies sales in Massachusetts or in the counter, you’re in the world or something. And that record of hers was broken a couple of years ago. And she was really unhappy that the person who broke it was a young woman who set up a card table and cookie sales outside of a marijuana store that was open. My sister had to knock on doors to make all those sales and she felt this woman took an unfair advantage.
Bruce Norris Wow. That’s a long time to hold the title though. That’s pretty cool. Well, you, I heard you talk about your kind of an interview with a high school counselor where you said something that upset them. That was when…
Peter Fortunato I speak to schools whenever I find a teacher that’s not even up to invite me.
Bruce Norris No, I mean, when you were in high school, you were you were talking to your counselor. And there was something that you said, about, you know, what your, what your goal was?
Peter Fortunato She asked me about what job I wanted to work towards, so that I could be, I could have a job when I got to high school. And I told her I wanted to be unemployed. And she really truly thought that unemployed meant sitting by this side of the street hoping to be given a handout.
Bruce Norris Right.
Peter Fortunato …boy, because I wanted to turn over the responsibility for providing income to me for my lifestyle, to my assets, rather than to my labor my time.
Bruce Norris Did you ever have a normal job?
Peter Fortunato I was an usher at the Salem theater in the ninth grade.
Bruce Norris Okay.
Peter Fortunato I want to I want to go see the movie and I might…
Joey Romero Bruce. I don’t think I’ve ever told you this. But one of the one of the things you know, growing up in the neighborhood I grew up with, you know, we were you know, we were poor. We didn’t have money to do stuff in video games. Nobody had a console at their house, we had to go to the store, put a quarter in the video game. And that’s how we would play. Well, one day one, my friend, my friends are across the street. And they’re using a hammer, and they’re pounding nickels into the size of a quarter. And so that’s kind of sort of reverse entrepreneurial ism, right? So, we would get quarters and get five, you know, nickels at forum, and then we would turn them into quarters. And that’s how we got to play more video games when we were little kids.
Bruce Norris Yeah, you know, do you know who Ward Hanniga is?
Peter Fortunato Oh, sure.
Bruce Norris kay, well, here’s Ward’s entrepreneur, and that he was he was left at an orphanage when he was 2.
Peter Fortunato Yup.
Bruce Norris And he made up his mind that he was, you know, he had, he had an encounter with an aunt, when he was about eight. They went around New York for about a week and had a profound effect on him, because she told him at the end of that, Ward, I’m no longer going to worry about you, you are going to be an amazing man and be very wealthy. And he believed that in every circumstance he ever faced, but when he was a kid, one of the things he did that was entrepreneurial, is that he would go on the bus. And there were overlap always last minute smokers that smoke just to something they just lit and then they tossed it because you couldn’t have. So, he collected those and put them in little packs, and sold the packs of cigarettes for like a buck. I just thought, Oh, man. That’s why. That’s why I asked because I love those stories of you know, what people thought of doing to create revenue.
Peter Fortunato When I speak to the schools, one of the things I always speak to school, I always say to the kids, do you like money? And they always say yes. What do you do to get money? And very sadly, because I’ve spoken in schools since 1986.
Bruce Norris Wow.
Peter Fortunato Only twice if I had a child say something that didn’t involve labor. They mown lawns, they cleaned the house. They they worked it was just awful. I had a little boy who was nine. And he said Mr. Fortunato, I bought a Pepsi machine, a soda machine. And I bought it for $700 I had $200 I’d saved and my mom and dad lent me 500. Wow. And we put the soda machine in the laundromat in my dad’s, dad mom’s trailer park. And every so often, my dad and I go to Sam’s Club and buy soda, whatever sodas we can get for 25 cents and put them in the machine. And they sell for 50 cents. And he said I make $125 every single month without work. That’s just wonderful. And then years later, I was in the third grade. I was at a third grade class in New York. And a little girl said Mr. Fortunato. I make money by promising my brother that if you’ll pay me $5 I won’t tell our parents what he did. And so she was an extortion work for two kids. I will never forget as long as I live. Those are just great kids.
Bruce Norris Oh, they’re very funny stories. Oh my God.
Peter Fortunato I want to arrange a marriage, but never got it done.
Joey Romero Okay, that’s gonna do it for part one of our interview with Peter Fortunato. Be sure to catch show next week for part two. Thanks.
Narrator For more information on hard money, loans and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.
Aaron Norris The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.