Happy Friday!! Getting into anything good this weekend?
This is an extension to Wednesday’s post on kick-ass money ideas that I wanted to separate out just because it’s so chalk-full of great pointers. Especially if you’re interested in the real estate game – though it applies to ALL areas of life and business/career growth.
You gotta surround yourself with people DOING the stuff you want to be doing! And *actually* doing it too, btw, not just talking or blogging about it ;)
This note comes from “Simple_Chaos” after reading fellow blogger Jeff Rose’s story on how he crashed and burned trying to buy his first rental property here on the blog 3 years ago. Take it away, Chaos!
Reading all the comments. Some great ideas being passed around.
In my personal experience with owning several rental properties, I’ve learned some valuable lessons.
Take advice from people who have what you want!
Before I started in the RE game I was 25 (I’m 33 now), and I knew nothing about Real Estate. Reflecting back on my sphere of influence at the time, I didn’t really know anybody that had rentals or were millionaires.
I focused my time and energy on surrounding myself with positive like minded people that had what I wanted. I learned about Passive income and some basic rules about the real estate game.
I was fortunate enough to spend some time with a very humble and modest Financial advisor who turns out owns 170+ doors worth millions. One of the first things he told me was the tip about taking advice from people who had want I wanted… He also encouraged me to surround myself with a strong team of professionals that matched the first piece of advice.
He connected me with his accountant who only takes clients based on referrals. Funny thing… he’s a millionaire also who owns rental properties including commercial and multi-Family buildings. The accountant agreed to take me under his wing and basically mentored me for free because I asked. Normally his fees are $200+/hr (I still pay him for doing my taxes. Though he taught me how to prepare my own taxes now so that I don’t have to pay him to much).
He then connected me with his RE agent who has become a great friend. No surprise – he owns a bunch of rental properties too and works with an awesome contractor/handyman that basically does all of our repairs or renos on all of our properties. It’s mutually beneficial, which is always a focus for me when structuring deals.
I’ve set up referrals deals with all these people, so every time I refer them someone that generates them new business they pay me a small referral fee. It’s a win/win/win.
I built two properties through a custom builder that was small at the time and family ran. I built a great relationship with them and the gentleman that does the sales for the company connected me with his daughter, who is a mortgage broker who – Surprise again!! – owns a bunch of rentals as well.
I think you get the point :)
I buy or build my properties based on cash flow, not growth in equity through appreciated. Although it has turned out very well for me from that standpoint as well.
The only way to every become an expert IMO is to do it. You can read 1,000 books, articles, attend seminars, etc. Experience will always be the best teacher.
Before I start any business or project I always ask myself…
“What’s the absolute Worst case scenario, and can I live with that?”
The worst case scenario getting into rentals would be if all of my tenants didn’t pay rent, then vacated the premises after causing major damage, and then me losing my job while we were in the middle of a market recession. That seemed like a pretty awful situation to find myself in. It would basically mean I’d lose everything.
Could I handle that? My answer was YES. Why? Because in the end it’s only money. I still have my health, my relationships with family and friends, and all the experience I’d gained up to that point.
If I had to do it all again, I’m certain I could in a much shorter period of time while being more efficient. What’s the difference between giving 1 set of keys back to the bank or 10? Also, the likelihood of that happening is very low. On the other hand from a risk vs. reward standpoint if it pays off in 8 years from now I’ll have $3M+ in property paid off and $15,000+/month in positive cash flow.
That’s without doing anything different from today on.
Onwards and upwards!
Again, all good stuff to think about whether real estate related or not! Surround yourself with people already accomplishing what you dream of, weigh the worst case scenarios for all ideas/projects, and then more importantly – *take action*. We won’t win everything we go after, but we’ll lose ALL of them if we never try anything out.
Look for someone new you can talk to this weekend who’s already reached one of your goals and get that ball rolling! It usually only takes an “ask” and a coffee (or if you get nervous like I do, a beer :)). I bet you’re only 1 person removed from your friends and family too – a great place to start.
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!