Don and Ryan Zeleznak

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Phoenix, AZ

Years Investing: 30 (7 years for Ryan)

Number of Deals in 2004: 6 office/condo buildings; 4 single-family homes; 3 condos; also building 12 office/condo buildings with over 1,400 units (they'll keep and rent 5-10% and sell the rest)

Career Deals: Thousands

Units Owned: 100,000 square feet of office space; 20 residential rentals; 70 acres of commercial land; 12 office/condo projects; 4 commercial projects; 2,500 lot golf community; and currently building over 1,400 residential homes.

Areas of Expertise: Real estate syndication (over 5,000 units in 70s and 80s); fix and flips (over 1,200); as well as foreclosures; wraps; lease options; and developing opportunity for clients.

Real Estate License: Yes

If you're good at what you do, eventually the business comes to you. That is how Don Zeleznak built not one but several businesses, finding and making real estate deals not in one but in two states, using different strategies.

In 1974 Zeleznak was a financial manager in Minnesota when he and his wife moved from their condo into a house big enough for them and their new baby, Ryan (now an investing whiz in his own right). But instead of selling the condo, they rented it out. A couple of years later, when they moved again, they did the same thing. Those simple decisions planted the seeds of a massive investment syndication business: Zeleznak found people who wanted to sell their properties and brought investors to the table. He crafted the deals, which eventually involved hundreds of units.

"We started small, and the deals got bigger and bigger," he says. "Over the course of that six-year period I probably had 300 investors, and we had syndicated about a hundred million dollars of residential deals."

Zeleznak quickly became a multimillionaire, and his phone never stopped ringing: everyone seemed to know that he was the go-to guy if you wanted to buy or sell. He also started a management company that eventually handled 5,000 units. But by the early1980s Zeleznak was ready for a change. First, most of his syndication deals involved people who used their investments as tax shelters, and he knew that the proposed tax laws would change everything. Second, the long Minnesota winters were starting to become a drag. In 1984 he sold it all and moved to Arizona.

"For the first year and a half all I did was play tennis and relax," he says. "I was unwinding from a very busy six to eight years."

But Zeleznak wasn't satisfied simply relaxing, and so soon he threw himself and his son into a new business, one he continues to this day: wrapping loans to nonqualified buyers and putting together wrap deals for other investors. It's a win-win situation, he explains. Investors make a profit, and people whose poor credit would shut them out from traditional financing finally can buy homes of their own. While the deals involve some risk for the investors and buyers, Zeleznak says most have very happy endings.

"Out of the 1,100 deals we've done, we've taken back about 47 or 48 properties on foreclosure," he says. "So we have around a 4:/2 percent default rate, which is pretty good considering the types of credit issues these people are challenged with."

One of the big advantages of wraps, he says, is that they aren't as labor-intensive. Besides working with Ryan to continue their mortgage wrap deals, Zeleznak has been focusing lately on developing and financing large-scale commercial deals, which are also less management-intensive.

"Remember, I was involved in rentals in a very big way in the Midwest and know the headaches that go along with that," he says. "But how do you think people treat the property if they plan to own it?"

Zeleznak attributes his success with wraps, like his earlier successes, to an investor's mindset that allows him to see opportunity within calculated risks. It's not a mindset he believes everyone has, though, and he tells a story about his grandmother to illustrate that.

"She gave me $10,000 to invest because that money was earning only 5 percent at the bank," he says "I put her into a conservative mutual fund; she couldn't sleep at night because she had read all these articles about the downturn of the stock market."

When he transferred her money into a bond fund, she started sending him articles about how the government was falling apart.

"That's when I said, 'Grandma, it's time to put the money back in the bank,'" he says.

But for Zeleznak, who has the mindset, the skills, and the knowledge to recognize and act on a good deal, there's no good time to put money in the bank. Whether it's a rental, a rehab, or a wrap, Zeleznak and his son consider the possibilities and act.

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