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!
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Hey Folks,
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!
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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.
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Great tips! I just recently got into a small business with my siblings. Imagining the worst case scenario is tricky to do based on realistic situations. But I feel the worst case would require me to add about two years more to my FIRE goal.
Good post, thanks!
Oh man, ballsy going in w/ the fam! But also so cool to be able to share something like that together!
The funny thing about RE investing in particular is that it seems like such a difficult world too understand at first, but I’ve found that other real estate investors are keen to help each other because there is so much room in every market.
I agree with Hannah. There is so much to learn about RE, but the meetup we’ve joined is full of people willing to offer their assistance, resources, and advice. This was a real comfort for us since it’s the direction we want to go and know 30 people doing it is only helping to move us forward.
Nice!
Great approach! We should always consider the risk that our return OF principle is at jeopardy, and not be overly focused about our return ON principle.
In your case, even a bad business venture might mean the relationship actually ends up growing and you’ll be wiser the next time.
You hit the nail on the head about the ultimate worst case scenario. A refreshing perspective, and an excellent reminder that experience is more valuable than money. It reminds me of the Andrew Carnegie quote where he was asked what would happen if all his plants/machinery burned down. He simply said, it would take him a matter of years to build everything again.
Best of luck on your rental properties!!
That’s a great perspective and advice about surrounding yourself with people that have actually done something. There’s an expression, “You hear, you forget. You see, you remember. You do, you understand.” There’s no better way to learn than getting advice from people who have been there, done that, and then going out and actually doing it yourself!
Great quote! Totally stealing it!
Great reminder. I like the quote that says (paraphrasing) you are the sum of your 5 closest friends. Last week I was thinking about this same type of things so I made a list of the top 10 things that I would like to learn how to do. Now my next step is looking for people that I know that do those things and try to start up conversations about them to see if I can find a mentor for at least one of them.
My stated goal for this weekend is to start a conversation with at least one person on that list.
I love that idea Roy – even one will move you forward!
I was thinking of the same quote as I was reading this. Being selective about the people that you spend a lot of time with can do wonders for lifting you up and making you a better and more successful person.
LOVE it, Roy!! Totally do-able too!
Time to return and report. I failed. I had someone identified and knew that I would see him at a meeting I had to go to on Saturday but I hadn’t ever spoken to him before and didn’t get the chance to introduce myself since he walked in late then was talking to someone else afterwards. But I’m going to keep looking for opportunities.
Hey, you did more than anyone else did by at least trying! Maybe the world knew you’d stumble and say something stupid, so it’s waiting for the next occurrence to rock it ;)
“Experience will always be the best teacher” – this is true but I really appreciate the way you went about finding mentors and seeking out there advice! I’m guessing they did it (and for free) because of what they saw in you. Unfortunately we watched some folks “flip” a house down the street from us and then try to sell it FSBO. It is sale pending now – 6 months later, with weeds everywhere and an unfinished siding job. Not sure these folks had the means to lose what they have – although their experience has certainly taught them something.
Seeking out meaningful relationships where both sides win is huge. I have a few real estate agent friends (one that is a multi-millionaire) and they love helping out and answering any questions we have. They make commission off any sale, I get to work with someone I trust and I always recommend them to people I know looking for an agent.
Great advice on thinking about the worst case scenario – fear paralyzes and if you set expectations it makes it less scary
I did this for my business, too. I am surrounded by people in my field who also run their own business. We answer each other’s questions and refer folks to the correctly specialized one. We recommend CPAs, etc. It helps so much. I have definitely called one of these folks at 11:30 pm with a question, and they answered and explained things so clearly.
Nice! I’m sure at 11:30 they thought it was an emergency too, haha…
“What’s the absolute Worst case scenario, and can I live with that?”
That approach is pure gold and classic Stoic thinking. It also ensures that we try the worst on for size and anything better than that scenario feels like a relief of sorts. It helps us let go of the fear and make a decision we know we can stomach.
I’m totally on board with your approach in general. It’s positive, it comes from a giving perspective and usually, this approach results in our having even more opportunities come our way. It stems from the belief that opportunity isn’t a scarce resource. It can be created. There’s plenty for everyone.
Great advice! Surrounding yourself with people who have what you want and learning by doing – two things I try to do in my life and so nice to read that it’s working for others. Thanks for sharing!
This is some awesome advice! In How To Be a Millionaire the authors regularly mention how those who accumulated wealth used their network to their benefit. This testimony is proof that this works. I’ve gotta start networking a little more because I certainly want to own rental property in the future.
You are speaking my language!!!!
It amazes me how people will take financial advice from others who sound great but have zero net worth and ignore others who are millionaires though they may be less flashy.
Ugh…
Haha, yup… reminds me of reading a blog post once on how to quit your job and work for yourself, only to then notice that the author was *ahem* working a 9-5 and not working for herself.
Good advice.
They say you are the average of the five people you spend the most time with, so you have to choose those people carefully.
This is the best advice I’ve read all week. Surrounding yourself with like-minded individuals is the easy thing to do, but it is better to surround yourself with those who out ahead of you and winning the race you have just started. I wish I had learned this much sooner.
Yup! I remember an old boss once said he only hires people that are smarter than him so he can get better (helping the company grow more too!).
I wanted more passive income since we are trying to get me pregnant, and getting real estate loans was getting impossible thanks to my specific situation of self-employment…we just don’t have enough proof or history for most banks and they are scared about how much of our income is in cash and checks (pet sitting). Sooooooo…I already have a blog and work online too. I reached out to Michelle at Making Sense of Cents and got some affiliate income pointers (she makes $50,000+ a month on affiliate sales). I implemented those and then I bought her e-course as soon as it came out (budgetinginthefunstuff.com/affiliatecourse). Now I am working my butt off along with a large group of her other students to increase my affiliate income (she has a private facebook group and it’s been a huge help). So far, I’ve made two sales since signing up. That more than paid for the course! Everything from here is gravy!
PS That was my long-winded way of saying, YES, surround yourself with people that have what you want and then put their suggestions into action!!!
Haha… I’ve heard about the course – sounds really good!
I love the worst case scenario! My husband is a little too optimistic about real estate investing and I keep telling him to consider worst case scenario. Thank goodness he’s being a little more cautious now.
I live by this and really enjoyed that you shared a topic on the power of networking. No matter what the subject we should meet as many new people we can , so much to learn in life.
MOST DEFINITELY.
You learn a lot even from those much farther down on the totem pole (or even the haters!) too! Never hurts to chat around and try plucking out gems.
I’d love to get into RE rentals, but as it is we rent ourselves, and the RE market around Denver is so hot that we can’t get into a house even though we’ve been looking at home prices skyrocket for years now. Just a crappy time for our market.
BTW, there’s no way to get an email when someone replies to my comment, or new comments in general? There are plenty of great, free WordPress plugins floating around.
I know – i need to look into it again, sorry about that :( the last few I tried kept crashing the site so gave up and then just forgot. Will add back to the list!
Subscribe to Comments Reloaded has been doing a good job for me on Enwealthen. I’m using SendGrid but expect it would work with any mail service.
Thanks, Jack!
Great points, and I completely agree with “learning by doing”. I’ve been in real estate investment for 20+ years but mostly on the money side. More recently I’ve wanted to learn the construction side of the business and I found volunteering for Habitat for Humanity provided invaluable lessons and experience in construction. Even if you don’t want to get your hands dirty, knowing a little about how’s it’s done will help you make better decisions when dealing with contractors and subcontractors.
Smart!! And you get to shoot love into the world at the same time!
I am so glad that people who are financially successful share their secrets on how they reach where they are now. So, it makes it easy for us to reach ours more easily, J Money.
Makes sense. I also think this reasoning is why personal finance blogs are growing so much in popularity. Instead of reading a PF article by a journalist, why not read a PF article from a PF blogger who actually went through what s/he is writing about? No brainer!
I’m a RE addict and have been doing a lot of research on some new real estate crowdsourcing investments and doing some home improvement as well. It’s good fun!
Sam
True about the PF Space. And it doesn’t hurt that we actually engage with our audience too and share real-life #’s around! We’re all voyeuristic at the end of the day which beats out theory talk any day or night.
Really enjoyed this one. I think the internet makes it almost too easy to listen to people who haven’t walked the walk, because everyone now has a platform to reach a bigger audience. Thanks for the advice!
I love when people share financial advice on their blogs. I also like seeing how these bloggers get to where they are at realistically. So many people think online work is so easy to find, when I believe it can be one of the hardest jobs out there.
Great advice! I need to help my husband find some inspiring people to surround himself with. He’s an uphappy lawyer – such a cliche, I know – but really can’t imagine anything else for himself. I think he would be greatly helped by finding others who’ve made the switch and are enjoying a more fulfilled life.
Or maybe practicing law in an area that’s more fulfilling if that’s the area making him unhappy?
I just came across this guy whose story was pretty interesting (a doctor who had an epiphany):
http://www.minimalistdoctor.com/2016/08/01/hello-world/
I’ll take a look – thanks!
Your articles are challenging and I find it interest keep up the good lectures.
Glad you’re likin’ em, man.
Especially coming from Moses! ;)