You can pretty much be broke at any age. For me, I was pretty poor growing up. So, there was really only one way to go, and that was up.

When it comes to financial mistakes, though, I believe that most of them are made between the ages of 25 and 35 years old.

You see, that’s the first quarter of the football game of life, or the earning years, which for most of us is between the ages of 25 to 65. It also looks like some of us may be going into overtime too, as the government keeps pushing back the retirement age (which I believe is now 67).

So, where do most of us go wrong when it comes to controlling our money?

Financial Stability = Discipline

Recently, I read where Dave Ramsey, the anti-debt guru, tweeted that if you could just save $100 a month between ages 25 to 65, at 12%, you’d have $1,176,000, thus making all of us potential millionaires. He then explained that this statement was intended to inspire people to save.

I think Dave does a great job getting folks, who are in financial trouble, back on track by eliminating all of their debts. Although this puts folks in a much better financial picture, it does so by making the assumption that all debt is bad.

For example, good debt is something that you take on to improve or to build wealth (i.e. a student loan to get a better paying job, a mortgage for a rental property, or a loan to expand your business). Bad debt is when you purchase something that goes down in value or doesn’t throw off any additional cash flow (i.e. credit card debt, a loan for a leisure vehicle, a pay-day loan, etc.).

I also believe that it’s making the assumption that people, who aren’t necessarily good with money, are not disciplined, and therefore, should not have any debt.

private-money-meeting

The downside is that this person is limited by the negative stigma surrounding debt and is less likely to utilize disciplined leverage. By this, I mean utilizing good debt to build wealth. For example, if I took a HELOC (Home Equity Line of Credit) and I used that to buy or fix-up another property or I purchased a note with a higher return than the interest rate I borrowed at, this would be a disciplined way to leverage debt.

Utilizing these types of strategies, by the way, is how I was able to build most of my personal wealth.

Other than establishing bad debt and not utilizing disciplined leverage, another common financial mistake is living beyond your means.

Related: The 5 Steps Necessary to Master Your Personal Finances

Budgeting: Wants Vs. Needs

One thing I see wealthy people do is that they have a cash flow budget, and they pay themselves first. They know their own numbers (exactly how much they need to live on, their income, expenses, etc.), and they have a plan for the rest of their cash.

When I used to meet with first-time homebuyers, as a real estate agent for a homebuyer qualification, the first thing we talked about was their family budget. This consisted of all income and expenses and how much they would qualify for as far as housing expenses go (the biggest bill for most). Often, this is the first time many couples even look at all of their expenses written down.

For many, this was also the first time that they analyzed their wants versus their needs. They got to see firsthand how much was too much from a lender’s perspective. They also learned exactly what the bank was looking for in a mortgage, which is usually based on the borrower’s stability and ability to pay (things like front-end and back-end ratios).

Then why are so many who are starting out living beyond their means?

Maybe it’s in our instant gratification culture. Maybe we all want to show off to family and friends. Maybe instead of taking control of our money, we’re letting it control us.

In George Clason’s book, The Richest Man in Babylon, he tells parable-like stories about how clay tablets found in the Middle East from 8,000 years ago hold the secret to becoming financially well-off. Besides paying yourself first, one included instruction is to live off 70% of your income, save 10%, invest 10%, and give the remaining 10% to charity.

If this simple formula is the key to attaining financial stability, why is it that most of us don’t follow it?

Related: 8 Traits of Successful Real Estate Investors

Financial Stability

In Robert Kiyosaki’s Rich Dad’s Raising Your Child’s Financial I.Q., which comes with the Cash Flow for Kids game, he states that every time a dollar hits our hand, we’re choosing to be rich, middle-class, or poor by what we decide to do with it (from a cash flow perspective anyway).

If we spend it on expenses, we’re choosing to be poor. If we buy something that we think is an asset but it’s really a liability, then we’re choosing to be middle class. But, if we invest our money in an asset that throws off income, then we’re choosing to be rich. Sure, this is a very simplified way to look at it. But, if you think about it, it ties back into paying yourself first and hopefully investing that money in something that cash flows, so that someday you’ll have more than enough passive income to pay all of your expenses and become financially free.

So, I guess the secret is… there is no secret. You need to be disciplined, live within your means (unless you can figure out a way to expand your means), and have a budget, as well as a plan to invest in cash flowing assets. The sooner you can do this, the faster you’ll build true wealth.

We’re republishing this article to help out our newer readers.

So, what’s your secret?

Leave your comments below!





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How much money does it take to invest in real estate? Is there really such a thing as “no- or low-money down?” After you hear today’s interview, you’ll know the truth! Today we sit down with Shiloh Lundahl, a real estate investor who specializes in putting together deals using a variety of different no- and low-money strategies in some pretty unique combinations. From utilizing business lines of credit, to bringing in partners, to hard money, to lease options and beyond, this episode will give you tons of ammunition for your own creative finance deals. And don’t miss the incredible strategy that Shiloh uses today to make 300 percent more per deal than if he were to flip the home. It’s pretty darn fantastic!

Click here to listen on iTunes.

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In This Episode We Cover:

  • How Shiloh started his real estate investing journey
  • The book that helped him heal
  • Details about his first property
  • Office hacking and subleasing a sublease
  • His first flipping deal — $30K turned to $195K
  • How he bought his dream car
  • Losing $5K on his first flip
  • A hack with city inspectors
  • The importance of needing an assistant
  • The six different strategies he uses creatively
  • Moving to a lease-option model
  • Getting $800K in business lines of credit
  • Lease options and how he uses them
  • Selling properties 5–7 percent higher than the current ARV
  • Explaining lease option through videos
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Fire Round Questions

Tweetable Topics:

Connect with Shiloh





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At the end of last year, Puerto Rico suffered a devastating hurricane, which some estimates say killed as many as 5,000, and left the island without power for weeks. Now, Americans are moving in on the island, capitalizing on the downward trend in real estate prices due to the storm. A new study shows home prices on the island decreased by an average 15% since the storm.



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Side hustle is a huge buzzword in the FI community. Make extra money on the side doing something fun, something you love, or even just something that pays really well.

Today we bring in Nick Loper, Founder of Side Hustle Nation, to share his expertise about side hustling: What they are, who they’re for, and how to implement one of your own. Nick also shares some of his favorite side hustles, including some surprisingly easy ways to make money.

Looking to increase your income? You MUST listen to this episode!

Click here to listen on iTunes.

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Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds. Thanks! We really appreciate it!

Podcast Sponsor

Patch of Land is an online peer-to-peer or ‘peer-to-professional’ real estate crowdfunding marketplace that connects professional real-estate developers needing to finance their real-estate projects to willing lenders or real-estate investors.

Visit PatchOfLand.com/BiggerPockets or call 888 710 6736 to learn more!

In This Episode We Cover:

  • How Nick started his first side hustle
  • Working for Ford as a territory manager while hustling on the side
  • Nick’s personal position toward financial freedom
  • How Google shut down his website on the first day of his retirement
  • The risk of relying on your job as your only source of income
  • Side hustling as being entrepreneurial and more time leveraged
  • On having an exit plan
  • Side hustle ideas that anyone can do
  • Marketing services for freelancing and consulting
  • Hiring people on Fiverr
  • Tips for people who want to generate more income
  • Business idea-generating frameworks
  • The “intersection method”
  • The “rip, pivot, and jam” method
  • The sniper method
  • Weird and profitable side hustles
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “Start something small, start something low risk, and build that up as much as you can.” (Tweet This!)
  • “Don’t ever complicate things. Don’t try to necessarily reinvent the wheel.” (Tweet This!)
  • “Start with what you have when you have it.” (Tweet This!)

Connect with the Nick





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Sometimes you inherit tenants when you’re an active rental investor.

Many landlords instinctively want to keep inherited tenants to avoid vacancy, property updates, and the other costs and headaches that come with turnovers. Some will go so far as continuing to accept far lower-than-market rents to avoid rocking the boat.

Other landlords view all tenants they didn’t personally screen with distrust and instinctively want to get rid of them at the first opportunity.

Which impulse is right? And how do you raise the rent on these inherited tenants if you do decide to keep them?

Here’s the landlord’s guide to handling inherited tenants, and exactly how to proceed for maximum ROI.

5 Steps to Raise the Rent on Newly-Acquired Tenants

1. Screen them for yourself.

Evaluate all inherited tenants as if they were new applicants.

First, talk to the seller about what kind of tenants they’ve been. Do they always pay the rent on time? How clean are they? Have they ever violated the lease agreement?

Ask the seller for copies of their screening reports from when they originally screened the tenants and a copy of the original rental application.

Inspect the rental unit, giving the tenants as little notice as possible. You want to see for yourself how well they treat the property.

If the tenants are on a term lease, use the months in between purchasing the property and when you need to make a renewal decision to evaluate them. Are they whiny or low-maintenance? Reliable or full of excuses? Do they respect the property and your lease rules? Be sure to conduct periodic inspections.

Are they good tenants? If not, non-renew them as soon as possible.

If they’re worth keeping, it’s time to raise the rent—without losing them!

excel-tips

2. Decide how much to raise the rent.

I never raise the rent by more than 5% at a time if I want to keep the tenants.

What’s the market rent for your rental unit in its current condition? If it’s significantly higher than what your inherited tenants are paying, you may need to gradually increase the rent over the course of several years to catch up with market rents.

Imagine your tenants are paying 20% below market rent. They’re good, clean, reliable tenants, and you want to keep them. You may need to make a judgment call—how long are you willing to space out the rent hikes to catch up with market rents?

If you can’t wait four years, to raise the rent 5% each year, then sit down with the tenants for a heart-to-heart. “You guys are great tenants, and I’d love for you to continue living here. With that said, you’re paying significantly lower rent than market rates, and I just bought this property and have a high mortgage payment. I’m going to need to raise the rent by X% to cover my expenses and make this work. I would love for you to stay, but I understand if that much of a hike is not feasible for you.”

One last thing: Make sure they can actually afford the new rent on their current income!

3. Build a relationship.

Have some time before their current lease term ends? Start building a relationship of trust.

Be responsive like you are with all your other properties (right?). If they call you with a concern, stay in communication with them until it’s resolved.

Ask about their children, their jobs, their hobbies. Spend a minute or two on small talk when you call them before getting down to business.

When you conduct inspections, use the time to get to know them better.

Ask them about their “dream improvements” to the property—what kind of changes they’d love to see, in a perfect world. (And let them know you can’t promise anything—you’re just trying to better understand what they want.)

When it comes time to sign a new lease agreement with an increase in rent, give them the courtesy of a phone call when you send the renewal notice. Renters are far more likely to renew if they know, like, and trust you.

4. Serve the written notice.

In all states, landlords are required to serve a written letter to tenants when raising the rent.

The advance notice timeframe varies by state, but it’s usually 30-90 days. Look up your state’s requirements many months before you actually want to raise the rent! Put a reminder on your calendar for when you need to serve the notice.

Have them select one of two options: renew at the higher rent amount or vacate by the last day of the current lease agreement.

If they choose to renew at the higher amount, don’t stop with just the signed intention to renew!

5. Sign a new lease agreement.

The prior landlord signed their own lease with the tenants. While that transfers with the sale of the property, you want to have your own lease agreement signed.

First, it’s cleaner legally. Second, you can make sure it includes all your own landlord-protective clauses.

If your inherited tenants want to continue living in your property, it will be under your rules, not the last landlord’s rules. Make sure they read the new lease agreement carefully, and make sure they understand any new requirements or rules!

ROI First

Inherited tenants can be a blessing or a curse.

Many are excellent tenants who will continue paying on time and treating your property well for years to come. Others are deadbeats who made the last landlord’s life miserable and drove them to sell.

The quality of your returns as a landlord are determined by the quality of your tenants. Your goal as a landlord should always to be to fill your properties with low-maintenance, high-ROI renters—renters who will stick around long-term, pay on time, and treat your property well.

If that sounds like your inherited tenants, do what you can to keep them, even as you raise the rent. Otherwise, move on; the last thing you want is to be stuck with low-ROI renters just because another landlord made the mistake of leasing to them!

What have your experiences been with inherited tenants? Have any tips for raising the rent on them, without losing them?

Share your experiences below!





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The real estate investment trust sector is seeing an uptick in female leadership, as a new survey reveals more than half of newly elected directors are women. But despite corporate calls for diversification, most boards have only one or two women, showing that the industry clearly has a long way to go.



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Buying and holding income-producing rental property is great. It offers the potential for passive income, long-term wealth building, and tax benefits. Still, trying to manage your rental properties yourself can really create a love-hate relationship with your investments.

Here are three of the things I love about it—and three things I despise.

3 Bad Things About Being a Landlord

While rental property is a smart investment, there are some downsides to being your own property manager.

1. No Vacations

Despite all the hype and guru claims, once you get into it, managing your own properties really isn’t that passive at all. You can definitely say goodbye to the idea of turning your phone and laptop off. You have to be on call 24/7, 365 days a year. In the event you decide to outsource management, then taking vacations can be more stress-free.

landlord-traits

Related: 5 Reasons You Don’t Want to Be a Landlord of Multiple Properties

2. Poor ROI on Your Time

The above means that you end up getting a poor ROI on your time. This is largely because of all the calls you have to handle and make and any repairs or issues you have to fix or coordinate yourself. Not many people get into real estate intending to barely make minimum wage, but some might make even less if they do the math. If you’ve got bigger money goals, you just can’t afford to do it like this.

3. Liability

As I talking about in this article on BiggerPockets, being on the frontline of property management can be risky physically, legally, and financially. For every dollar you think you are saving on property management fees, you are betting 10 more for all the things that can and do happen.

3 Good Things About Being a Landlord

You don’t really save much money by managing your own rental properties, but there are reasons you might want to try it.

1. More Control

You get direct control of all the money, how you shuffle it, who you rent to, and how you handle repairs and contractors. This allows you to have the ability to directly affect your bottom line and top line income.

2. You Can Do Better

When we don’t like the way we see other people doing things, it is easy to believe we can do better, even if we don’t understand how things are the way they are. People say nobody will manage properties like they will as the owner, though this begs the question of whether you actually have the skill set to effectively manage properties. You can always try it. Just budget in enough for a professional third party manager when you do your numbers so you can hire out if you don’t like it or aren’t getting the results you want.

3. Lower Risk of Fraudulence

If you control all your own rents and invoicing and bookkeeping, you can reduce the risk of getting fraudulent things done to you. In the big scheme of things, you might lose more in the long run due to the return on your time than if a property manager runs off with a month of rent, but some need the control to sleep at night.

Related: The Biggest Landlording Mistake I Ever Made

Summary

Investing in rental properties is great. Everyone should do it. However, the results you really get will depend a lot on how you manage it and who manages it. Make sure you know these factors and always have the option of handing it off to a third party property manager.

Being a property manager can be much better than many other jobs, yet it is typically very low paying and a role that loves to be hated on by landlords and renters alike. It may not be the job for you if what you want is more money, time freedom, and passive income.

What do you think? Anything you’d add to this list of pros and cons?

Comment below!





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Do you own an investment property valued at $1,000,000 or more?

Do you pay federal income taxes?

Do you operate a corporation or entity that is for-profit?

Are you planning to the hold the property for more than one year?

If you answered yes to all of these questions, you are eligible to enter a raffle that will be held at the end of this article.

Just kidding. But you are eligible for major tax benefits, so keep reading.

You already know that real estate is the best industry to be in, but  you’re about to learn that it’s even better than you thought. Why? Because of all the tax perks that come along with it.

What is Depreciation?

It’s one of the best gifts Uncle Sam gave to property owners and real estate investors. Depreciation is a special tax deduction based on the concept that the more something is used, the lower its value goes. When you drive a new car off the lot, it immediately goes down in value. It’s the same with real estate. Every year, the IRS allows you to take a deduction of the property value against that loss in value. (This does not include the value of the land, which doesn’t depreciate each year). But here’s the best part — this applies even if your property value is appreciating each year!

Related: How to Use Cost Segregation to Increase Annual Depreciation (& Save Money!)

Simply put, depreciation is a paper write off for real estate.

OK, so I understand what depreciation is. And I know that a residential property is depreciated over 27.5 years—and a commercial over 39. But what does it mean to accelerate that depreciation?

These are very long periods of time. To make the benefits of depreciation more tangible, the IRS established shorter “lives,” as follows:

  1. Five years for personal property within the building (flooring, boilers, etc.)
  2. Fifteen years for ‘land improvements” outside the building.
  3. The standard 27.5/39 year rate for the structure of the actual building.

What does this mean for you? You can depreciate the value of the first two categories of assets at a faster rate and start saving on taxes during those first few years after purchase. These savings you can reinvest in other ventures.

How Much of a Property Can Generally be Re-classified Through Cost Segregation?

Usually between 10 percent and 30 percent of the property value.

OK, so let’s make sure I understand this completely. What are some examples of five-year personal property?

Flooring, carpeting, wall coverings, appliances, furnishings, special purpose lighting, special purpose plumbing, special purpose electric, and much more.

What are examples of 15 year property  land improvements?

Asphalt, fencing, landscaping, signage, etc.

Wait. So, all these years I’ve been willingly lending the IRS my money when I could have possibly lowered my tax liability to ZERO?

Umm…yes. But you can stop today!

Now comes my most important question:

Why Didn’t my Accountant Tell me About This?

A CPA isn’t qualified to perform cost segregation. Tax knowledge is not enough. You also need to understand engineering to calculate how each structure depreciates. That’s why there are cost segregation firms – which employ engineers that are trained in the tax code and tax experts who work together to conduct the cost segregation study.  

Your CPA can certainly apply the results once the cost segregation study is complete. But the IRS recommends (not requires) that those “competent in construction methodology or techniques” perform the actual study determining how much you can save.

Who Works at These Firms, if Not Accountants?

The firms hire engineers that are trained in the tax code and tax experts, and they work together to conduct the cost segregation study according the Cost Segregation Audit Techniques Guide from the IRS.

But you can’t just make claims. Everything has to be documented: what you built, when it was built, and how much you paid for it. The construction budget or the AIA (American Institute of Architects) documents will be used during the study.

Does This Mean That Certain Materials and Building Methods Can Save me More Money?

Yes. The materials used and how they are affixed make a difference in whether the property is considered a five-year property. As we said above, if something is part of the main structure, it is not personal property and can’t be accelerated.

What Are Some Common Examples of Things That Could be Eligible if Done Properly?

Floor coverings — if it’s affixed with permanent adhesive, nailed, or screwed, then it’s considered part of the structure.

Not eligible: ceramic tile, marble, paving brick, or permanent wood floors.

Eligible: strippable adhesives such as vinyl-composition tile, sheet vinyl, carpeting, and floating hardwood floors.

Should I Have Cost Segregation in Mind Already as Soon as I Start Building or Renovating?

You should. A savvy real estate professional will keep this in mind.

Related: Your Tax Write-Offs Could Affect Your Ability to Get a Loan: Here’s How

What are Other Examples of Things That Could be Eligible?

  • Mirrors clipped to the wall instead of glued on.
  • Portable air conditioner units that plug in instead of being hard wired.
  • Demountable walls. These have become a very common trend in corporations, educational institutions, health care, and government organizations. Such walls, in addition to making customizable work space easy, can bring in major tax savings as they are not considered a structural component.

Are There Other Benefits to Bringing in a Cost Segregation Expert in the Planning Stages?

Yes. Cost segregation engineers can review the construction contract and identify the line items that need to be priced out separately. Knowing the actual costs will allow for a much more accurate report than having the engineers estimate the cost down the line.

When Does the Property Begin to Depreciate?

Depreciation begins when the property is “placed in service.” For a new construction, this is generally when the property is advertised as “ready to move in,” or when monies have been transferred to a permanent account.

When Doing Renovations, What Needs to be Capitalized and Depreciated — And What Can Just be Deducted as an Immediate Write Off?

If the property is rehabbed before being put into service, the rehab expenses should be added to the basis. If rehab work is done while in service (tenants are still there), you can fully expense an item that would normally be capitalized if it’s less than $2,500.  

You can only fully expense those items (it’s called de minimis safe harbor rules if you want to get technical) after the property is placed into service. Where the expenses were incurred before the property is placed into service, then they almost always have to be capitalized.

That’s the technical answer.

Does This Put me at Risk of an Audit?

If the engineering report is well-documented, the cost segregation is not only a permissible depreciation method, but it is actually the preferred technique under the internal revenue code. However, if a CPA uses ad hoc calculation, or relies on a contractor’s guesstimations of cost, it is a surefire way to fail in the event of an audit.

Are There Any Other Advantages of Doing a Cost Segregation Study?

If a building component subsequently needs replacement and a cost segregation study was done on it, taxpayers can write off that component’s remaining tax basis.

Example: A cost segregation study showed the carpeting to be initially valued at $100,000. Two years later, when the carpeting has an adjusted tax basis of $80,000, it needs to be replaced. The taxpayer could deduct an $80,000 loss. Without a cost segregation study, though, no loss could be taken because the carpeting and building tax basis would remain intertwined.

What is 100 Percent Bonus Depreciation?

A new law that took effect on September 28, 2017, determined that any five- or 15-year asset placed in service (by you) for the first time — whether it was just constructed or newly acquired — is now eligible to depreciate the entire value of an item in the first year. With this law, it is more important than ever for real estate companies to use qualified cost segregation experts to maximize their savings and be eligible for 100% bonus depreciation.

What is the Biggest Fear When Discussing Accelerated Depreciation?

Depreciation recapture. When you sell a property, you must pay tax (capped at 25 percent) on the amount that you took depreciation deductions. So if you took $100,000 of depreciation deductions, you will have to pay $25,000 in tax upon sale of the property. This is only if you sell for a profit. However, the amount of personal property depreciation that was taken is taxed at your ordinary income rate.

Can This be Avoided?

With a 1031 like-kind exchange (details in another article) you can defer these taxes even further.

If I Accelerate the Depreciation on my Five-year Personal Property, Will I Have to Pay Taxes on All of That When I Sell?

It depends. Consult your CPA or tax adviser to learn about different strategies.

“You were right — I really did win a lottery. I’m going to cash in on it now!”

Do you have questions about cost segregation?

Share them below!





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Are you curious about investing but not sure if it’s right for you? I used real estate investing to pursue financial independence, but I had some doubts along the way. Personally, I have only done flips and buy and holds, but here’s what helped me figure out if real estate was the way to go:

1.  I Laid Out My Intended Role

A fantastic first question to ask yourself is: How much or how little do I want to be involved in my investments? Real estate can serve many purposes in many different ways. For example, real estate investment trusts are almost entirely passive. No middle-of-the-night phone calls, no managing, no nothing. You can also hire (competent) property management companies to take care of your properties. This way, you can stay as involved or uninvolved as you prefer.

If you prefer to manage yourself, you absolutely can. I personally invest in three different markets, and I manage about half of my portfolio right now. A company manages the other half, and I keep tabs on them. Prior companies I’ve trusted my properties and money with have made accounting errors and placed poor tenants in my property without my consent. That was a costly mistake that only I was responsible for. As a result, I tend to be really involved in my properties.

The major question is, how involved do you expect to be? To what extent can you trust and delegate to others? To what extent are you capable and confident of learning the laws regarding tenants and landlords? Many people invest and realize it’s more intensive than they want it to be. For me, it’s really not a bother to manage my properties. I’ve had a few late phone calls over the years, but I have an amazing team that helps tenants whenever they need it — and that’s key.

Related: Keep it Simple! 3 Ways to Launch Your Real Estate Investing Business

Not only that, but what is your temperament like? Are you able to provide a customer-oriented service that is also stern when necessary? I tend to be softer than I should be. For example, we just had vacating tenants who had things nailed into every surface of the wall they could find. They asked for the paint color so they could pass the move-out checklist. I gave them a paint color I knew to be close but not exact, advised them as much, and told them they needed to be sure it matched before proceeding. Well, they didn’t, and I had a cheetah-print light gray on slightly-lighter-gray condo when they moved out. I charged them minimally from their security deposit because I felt bad for not providing the correct paint color. A week or so later, I woke up and realized, hey—that’s not my fault! Please feel free to give me a tough time over that. My point is, even a few years in, I still find myself being a little too soft. I’ve successfully put my foot down on a number of items (such as lease breaks) without problem, though.

2.  I Determined My Goals & Priorities

What purpose is investing in real estate going to serve you? I figured out my financial blueprint from Secrets of the Millionaire Mind and found a way for rental properties to serve it. My goal? Financial security and financial freedom. Funny how those two words work together when we talk about money, eh? If your priorities are set and you are driven to work toward them and real estate can serve them, you’re likely going to be able to tolerate the ups and downs associated with real estate.

3.  I Learned to Let Go

Give yourself room to grow!  Not everything will go your way. I’m a very type-A person, unfortunately. This works to my advantage in many ways, but it has also allowed me to become more stressed than needed in some cases. I’ve grown into a much more relaxed person when things go wrong. Like when someone in your condo building accidentally sets their condo on fire. Or when a contractor suddenly gets arrested and goes to jail. I laugh at these two items now, because they have legitimately happened to me, and it makes it look like I run a circus of a business. I promise, I don’t. But there are always lessons learned along the way.

You can plan, and vet, and plan, and vet, and things still may not go your way. I am a very active person, and I usually have quite a few things going on in my life. Major appliances and other big repairs tend to need attention the moment I arrive in a faraway country half a world away. But that’s OK! That’s life. And things work out one way or another if you have a good system set up.

4.  I Taste-Tested It

No one is going to force you to become a legitimate real estate investor. Once I started blogging about this on my personal page and whatnot, I became the point person for friends and friends of friends regarding real estate, financial independence, etc. A friend of mine recently relocated for work and decided to try renting his house out rather than selling it. Sure, the market can fluctuate during that time should he decide against landlording, but it’s a risk he’s willing and able to take (key word: able).

Related: 10 Lethal Mistakes to Avoid on Your First Real Estate Investment

5.  I Learned More & Built More

Lazy people are the best, right? They think efficiently. I wouldn’t say I’m lazy, per se, but I definitely don’t like to spend time doing menial or pointless tasks. Neither do other successful business owners, which is why the Pareto principle is a thing! If you think spending time on whatever real estate task is too much, is there a way to bring that down so it’s tolerable? If it’s worth paying someone else to do it, can you delegate it to someone else? Do the numbers work on these properties you’re considering? Learn more before diving in, and take a calculated risk if you’re willing and able.

Once I started gaining more properties, my initial investment was paid back and profits were being rolled into new properties. I enjoy finding properties that give me a 30 percent ROI. That’s quite a bit more than the average of 7 percent over the stock market’s lifespan. I like being in control of the company’s decisions and installing environmentally-friendly showerheads and other low-flow appliances to save water.

Conclusion

I’m not saying that you absolutely should invest in real estate, but you definitely need to consider what you want from these investments and what you’re willing to do in order to reach your goals. You may have a bad experience here and there. It happens. And it has happened to me and many others. But for me, any time I need to do something real estate related, my average hourly rate is well above anything I’d make in another highly skilled job. I’m not working 40 hours a week, but I’ve cut my spending drastically (lower than Mr. Money Mustache even!) to a point where my properties can fund my way of life. That’s the dream I set out for myself, and as I sit at home during the day petting my dog and writing blog posts every now and then, I think I made the right choice.

What steps have you taken to lay the foundation for your real estate career?

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After Tuesday’s Case-Shiller report showed a 6.4% increase in home prices, experts in the housing market indicate wage disparities and lacking inventory as critical motivators. Keller Williams Chief Economist Ruben Gonzalez predicts that home prices will continue the upward trend, largely due to consumer demand.



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