Don King's secret to success with the "Rumble in the Jungle!"

[Dien Rice]

Now,

Don King isn't the most ethical man in the universe. However, he certainly did (does) have some smarts...

Do you know how he set up the "Rumble in the Jungle" - with virtually no risk to himself?

If you need a little memory jog, the "Rumble in the Jungle" was the fight between Muhammad Ali and George Foreman. It was held in Zaire - now called the Democratic Republic of Congo - in 1974.

Don King had this idea... He'd get Muhammad Ali and George Foreman to fight.

At the time, George Foreman was the undisputed heavyweight boxing champion of the world. Muhammad Ali had been stripped of his championship titles in 1967 after refusing the draft (for religious/ethical reasons). However, he was now back in the ring, and back on his way up.

It would be an epic fight. Would George Foreman destroy Muhammad Ali on his comeback? Or would Ali somehow prevail?

Where Don King was clever was... He offered the fight to both George Foreman and Muhammad Ali. They signed an agreement that they would fight each other, on the condition that Don King could pay them $5 million each.

Don King didn't have the money to pay them. So what was on his mind?

This was like an option contract. If Don King came up with the money, they were obliged to fight. If he couldn't come up with the money, well, Don King lost nothing. By getting them to sign, he was in a virtually no-lose situation!

(The same was true for George Foreman and Muhammad Ali. By signing, they were both virtually in no-lose situations too, at least financially.)

To make a long story short, Don King eventually managed to convince the dictator of Zaire, Mobutu Sese Seko, to put up the $10 million dollars to pay the two fighters $5 million dollars each. Mobutu paid it partly to get worldwide publicity for Zaire. I'm sure his own ego played a big part in it, too!

To him it wasn't much... As a dictator, Mobutu was worth billions. (Most of it was hidden in Swiss bank accounts.)

So, if the $10 million went to the two fighters, what did Don King get out of it?

Don King got to sell the worldwide broadcast rights! Which would have been worth quite a lot!

What interests me is the clever, virtually no-risk way that Don King set this up...

He may have cheated a lot of people over time, but from his history, it's clear he had a sharp mind. Pity he was unethical, too, and often didn't pay people what he promised - as he could have succeeded without needing to be that way.

Best wishes,

Dien

P.S. What happened in the end? Ali won the fight. George Foreman lost, and gave up professional boxing for a long time after that. The ironic thing is, George Foreman is now five times richer than Muhammad Ali. For that, he can thank the George Foreman grill!

[GordonJ]

Minimize THEIR risk by an enticing REWARD, a big enough payday to off set the losses, if incurred, and you'll finf plenty of people with the money to help with any project.

Tiny the tow truck driver, used an option contract to build a small fortune in the towing and auto repair biz. Started with just an idea and his "investor" had nothing to lose, either way.

But since Tiny was wildly successful, the original owner got a great ROI.

Options. Land contracts. Performance contracts.

These are all things which you can put to use.

Gordon

Originally Posted by Dien Rice

Now,

Don King isn't the most ethical man in the universe. However, he certainly did (does) have some smarts...

Do you know how he set up the "Rumble in the Jungle" - with virtually no risk to himself?

If you need a little memory jog, the "Rumble in the Jungle" was the fight between Muhammad Ali and George Foreman. It was held in Zaire - now called the Democratic Republic of Congo - in 1974.

Don King had this idea... He'd get Muhammad Ali and George Foreman to fight.

At the time, George Foreman was the undisputed heavyweight boxing champion of the world. Muhammad Ali had been stripped of his championship titles in 1967 after refusing the draft (for religious/ethical reasons). However, he was now back in the ring, and back on his way up.

It would be an epic fight. Would George Foreman destroy Muhammad Ali on his comeback? Or would Ali somehow prevail?

Where Don King was clever was... He offered the fight to both George Foreman and Muhammad Ali. They signed an agreement that they would fight each other, on the condition that Don King could pay them $5 million each.

Don King didn't have the money to pay them. So what was on his mind?

This was like an option contract. If Don King came up with the money, they were obliged to fight. If he couldn't come up with the money, well, Don King lost nothing. By getting them to sign, he was in a virtually no-lose situation!

(The same was true for George Foreman and Muhammad Ali. By signing, they were both virtually in no-lose situations too, at least financially.)

To make a long story short, Don King eventually managed to convince the dictator of Zaire, Mobutu Sese Seko, to put up the $10 million dollars to pay the two fighters $5 million dollars each. Mobutu paid it partly to get worldwide publicity for Zaire. I'm sure his own ego played a big part in it, too!

To him it wasn't much... As a dictator, Mobutu was worth billions. (Most of it was hidden in Swiss bank accounts.)

So, if the $10 million went to the two fighters, what did Don King get out of it?

Don King got to sell the worldwide broadcast rights! Which would have been worth quite a lot!

What interests me is the clever, virtually no-risk way that Don King set this up...

He may have cheated a lot of people over time, but from his history, it's clear he had a sharp mind. Pity he was unethical, too, and often didn't pay people what he promised - as he could have succeeded without needing to be that way.

Best wishes,

Dien

P.S. What happened in the end? Ali won the fight. George Foreman lost, and gave up professional boxing for a long time after that. The ironic thing is, George Foreman is now five times richer than Muhammad Ali. For that, he can thank the George Foreman grill!

Hi Diem, Gordon.
When I first learned about option contracts many. many years ago,
I thought they were the greatest thing since sliced bread. It's amazing
the power you can get from a little money and a huge amount of leverage.
In one of my collection of real estate books. the author described how back
in the nineties many houses that were rented had an option to to buy in the rental contract.
Almost no one paid any attention to this option.
Then when the great real estate boom occurred a lot of these houses were
now worth much more money. Someone might have a house with an option
to buy for 200K but the house is now worth $350k!
Again, most of these renters did not realise what they were sitting on.
But some savvy investors would seek out these houses and buy the renters
option and made huge profits on these houses. In at least 2 cases the
landlords went to court to stop these sales, but the court rule them
perfecty legal. Even today there may be renters with options to buy that
are far less than the value of the house, coming across one of those is like
coming across a pile of gold bricks. The trick is to find them. The book
mentioned some methods.
Also the author of the famous classic "No Money Down" described how
once he took a fancy to a commercial building. He found out from
the renter that there was an option to buy in the lease. If I remember
correctly. The building could be brought for 200K but was actually worth
about $415K. He made a huge killing on that one.
I have heard of someone getting an option on over a million dollars worth
of land for one dollar. Now that is leverage!
Why would someone grant the option so cheap? Here is one scenario.
Owner has about a million dollars worth of land on the outskirts of a city.
Mr savvy investor finds out that expansion is planned for that area and big
operators are buying up land. My savvy investor goes to the owner and says
I want an EXCLUSIVE option to buy your property for 1.5 million dollars
I wll pay one dollar for the option which will expire in 2 months.
The owners is happy to grant the option since he believes the land is worth
only a million. It is actually worth much more than that now
Now Mr Savvy Investor sells his option contract to one of the
wealthy investors for 100K and runs off to the bank. That is the
power of options. This can be done on much smaller levels too.

Trevor

[Dien Rice]

Thanks Trevor,

That's an amazing post! Thanks for sharing that information!

I didn't know about the "hidden" option-to-buy in many rental contracts...

Wow, if you got one of those, and the amount in the option contract is less than the house value - it'd be like picking up money off the street!

Certainly options can be very powerful... It can give you control of something (for a limited time period, usually), without having to actually buy it, for a relatively small cost...

In one of his reports, Jim Straw talked about using options to buy and sell used industrial equipment. You'd take out an option-to-buy on the equipment (for a relatively small amount of money), then see if you could find a buyer. If you could find a buyer for a higher price than your option-to-buy, you quickly exercise your option, then sell it immediately for a very low-risk profit...!

Best wishes,

Dien

Originally Posted by teamplayer

Hi Diem, Gordon.
When I first learned about option contracts many. many years ago,
I thought they were the greatest thing since sliced bread. It's amazing
the power you can get from a little money and a huge amount of leverage.
In one of my collection of real estate books. the author described how back
in the nineties many houses that were rented had an option to to buy in the rental contract.
Almost no one paid any attention to this option.
Then when the great real estate boom occurred a lot of these houses were
now worth much more money. Someone might have a house with an option
to buy for 200K but the house is now worth $350k!
Again, most of these renters did not realise what they were sitting on.
But some savvy investors would seek out these houses and buy the renters
option and made huge profits on these houses. In at least 2 cases the
landlords went to court to stop these sales, but the court rule them
perfecty legal. Even today there may be renters with options to buy that
are far less than the value of the house, coming across one of those is like
coming across a pile of gold bricks. The trick is to find them. The book
mentioned some methods.
Also the author of the famous classic "No Money Down" described how
once he took a fancy to a commercial building. He found out from
the renter that there was an option to buy in the lease. If I remember
correctly. The building could be brought for 200K but was actually worth
about $415K. He made a huge killing on that one.
I have heard of someone getting an option on over a million dollars worth
of land for one dollar. Now that is leverage!
Why would someone grant the option so cheap? Here is one scenario.
Owner has about a million dollars worth of land on the outskirts of a city.
Mr savvy investor finds out that expansion is planned for that area and big
operators are buying up land. My savvy investor goes to the owner and says
I want an EXCLUSIVE option to buy your property for 1.5 million dollars
I wll pay one dollar for the option which will expire in 2 months.
The owners is happy to grant the option since he believes the land is worth
only a million. It is actually worth much more than that now
Now Mr Savvy Investor sells his option contract to one of the
wealthy investors for 100K and runs off to the bank. That is the
power of options. This can be done on much smaller levels too.

Trevor

Hi Diem.
That is something I thought about doing getting options on expensive vehicles.
There is virtually no risk, it looks like a no brainer! The only
thing that stopped me was that many people have never heard of
option contracts and how do I explain to a buyer that I am not
selling the vehicle but the option to buy the vehicle? But since Jim
Straw thinks it's a good idea maybe I should look into this!
I have also thought of getting options on houses, not bargain houses
just regular houses and if someone wants to buy I sell them my option.
Again, the problem is having to educate the seller and buyer.
The real estate book that I learned about this from, said people are
more familiar with options out West, but in the East they are less creative.
Anyway, if you have any more info on what Jim Straw mentioned
let us know. Thanks.
Trevor

Originally Posted by Dien Rice

Thanks Trevor,

That's an amazing post! Thanks for sharing that information!

I didn't know about the "hidden" option-to-buy in many rental contracts...

Wow, if you got one of those, and the amount in the option contract is less than the house value - it'd be like picking up money off the street!

Certainly options can be very powerful... It can give you control of something (for a limited time period, usually), without having to actually buy it, for a relatively small cost...

In one of his reports, Jim Straw talked about using options to buy and sell used industrial equipment. You'd take out an option-to-buy on the equipment (for a relatively small amount of money), then see if you could find a buyer. If you could find a buyer for a higher price than your option-to-buy, you quickly exercise your option, then sell it immediately for a very low-risk profit...!

Best wishes,

Dien

Hi Trevor:

GREAT POST.

Do you remember the name of the real estate book where you first discovered options? I'd love take a read.

Thanks, Ryan M.

Originally Posted by teamplayer

Hi Diem, Gordon.
When I first learned about option contracts many. many years ago,
I thought they were the greatest thing since sliced bread. It's amazing
the power you can get from a little money and a huge amount of leverage.
In one of my collection of real estate books. the author described how back
in the nineties many houses that were rented had an option to to buy in the rental contract.
Almost no one paid any attention to this option.
Then when the great real estate boom occurred a lot of these houses were
now worth much more money. Someone might have a house with an option
to buy for 200K but the house is now worth $350k!
Again, most of these renters did not realise what they were sitting on.
But some savvy investors would seek out these houses and buy the renters
option and made huge profits on these houses. In at least 2 cases the
landlords went to court to stop these sales, but the court rule them
perfecty legal. Even today there may be renters with options to buy that
are far less than the value of the house, coming across one of those is like
coming across a pile of gold bricks. The trick is to find them. The book
mentioned some methods.
Also the author of the famous classic "No Money Down" described how
once he took a fancy to a commercial building. He found out from
the renter that there was an option to buy in the lease. If I remember
correctly. The building could be brought for 200K but was actually worth
about $415K. He made a huge killing on that one.
I have heard of someone getting an option on over a million dollars worth
of land for one dollar. Now that is leverage!
Why would someone grant the option so cheap? Here is one scenario.
Owner has about a million dollars worth of land on the outskirts of a city.
Mr savvy investor finds out that expansion is planned for that area and big
operators are buying up land. My savvy investor goes to the owner and says
I want an EXCLUSIVE option to buy your property for 1.5 million dollars
I wll pay one dollar for the option which will expire in 2 months.
The owners is happy to grant the option since he believes the land is worth
only a million. It is actually worth much more than that now
Now Mr Savvy Investor sells his option contract to one of the
wealthy investors for 100K and runs off to the bank. That is the
power of options. This can be done on much smaller levels too.

Trevor

Originally Posted by RyanMcGrath

Hi Trevor:

GREAT POST.

Do you remember the name of the real estate book where you first discovered options? I'd love take a read.

Thanks, Ryan M.

Hi Ryan, the book I found out about hidden options in rental
contracts was
"How to Buy Real Estate for at Least 20% Below Market Value,"
by John T. Reed. The author is a very savvy guy a West Point
graduate and very sharp businessman. He has a website where
he rates other real estate gurus and he has some pretty
unflattering things to say about some of them.
he does give a few tips about how to find rental properties
with options, for example sometimes they are recorded
and you can check the public documents. but that
does not look easy. Unless, the documents are digital and
you can come up with a custom search! If you do
let me know!

Originally Posted by teamplayer

Hi Ryan, the book I found out about hidden options in rental
contracts was
"How to Buy Real Estate for at Least 20% Below Market Value,"
by John T. Reed. The author is a very savvy guy a West Point
graduate and very sharp businessman. He has a website where
he rates other real estate gurus and he has some pretty
unflattering things to say about some of them.
he does give a few tips about how to find rental properties
with options, for example sometimes they are recorded
and you can check the public documents. but that
does not look easy. Unless, the documents are digital and
you can come up with a custom search! If you do
let me know!

John Reed lives in CA and is quite a guy to speak with. I read some of his material when I was a CA real estate broker. I even spoke with John about an insurance company with which he was having a dispute. It just so happened I had the same insurance company.

There are several good books about real estate options. If you are near your library stop in and browse through their selection. In a lot of areas the local county or city MLS has materials for sale.

Good luck with your real estate career.

[GordonJ]

TEST your marketing strategy.

Example. Say I found an old, obscure book on golf. I want to test the market before I sign a licensing agreement. I might give a small fee to the Copyright owner to "hold" the property while I test.

Then, I might do a Real Life Simulation (RLS) and test 7 or 8 Golf PROMOTIONS against each other to a group of my target market.

RLS gives the participants a chance to buy the product they like the best from their pay for being in the study...it is, actually, a low cost way to test before roll out, although today, with print on demand and Kindle type readers, it may be better to do a % of sales agreement right up front...

IF you have your target market chosen and there is easy access to it.

Even with IP, you got options. Some food for thought.

Gordon

Originally Posted by RyanMcGrath

Hi Trevor:

GREAT POST.

Do you remember the name of the real estate book where you first discovered options? I'd love take a read.

Thanks, Ryan M.

Waay Baack when I was studying "BIZ-OPS" I came across a guy who had gone out into the Texas Farm Area....near major cities and found "Farmers" who were wanting to sell their land and.....were willing to do a "6 month OPTION".

Well....what this guy did was get an "OPTION Contract" with the property owner ....for 6 mos.....then....proceed to offer the property (which meant Advertising).....and.....Sell the Property.....for a HUGE amount OVER what his option was)

Anyways......the guy who was doing this published a Book and Course ON HOW he was doing this and.....I looked in my archives and couldn't find.

Anyways......anyone with "GUTS" and a tidbit of info on how to do OPTIONS, especaiily with the Internet .....can STILL make a BUNDLE! with THIS method!

Don Alm.....sitting back and watching "Entroopeneerism" becoming replaced by "Entitlements"....."Whatcha Got Fer ME....Gummit?!"