HOW I GOT IN THE REAL ESTATE GAME AND HOW YOU CAN TOO.
How did I get started in Real Estate? David on my real estate team asked me the other day who taught me the real estate game.
Before I started in real estate, I was working hard on my own business. I was grinding—I went from discouragement, disappointment, to score. I was making a lot of money, but it was work. I started to sack my money away but didn’t know what to do with it.
When you get money, you have to learn how to use it. Money is dying when it’s not growing or going any place. I realized one thing: when I wasn’t pitching, I wasn’t making money. I was worried all the time that what I accumulated would be taken away from me. That wasn’t freedom!
ADVICE TAKEN
My uncle gave me good advice—he said that I need to learn how to get my money to work for me as hard as I work for it. He had invested in single family, section-eight government housing. I didn’t want to be involved with that type of real estate, but I took his advice…
When I told my mom about my desire to invest in real estate, she said I shouldn’t do it because people would call me at midnight about termites and broken toilets.
I wasn’t worried about that. I’ve been working my whole life for someone to call me! I was going around the country pitching, speaking, and hustling. If someone called me up that meant they were paying me!
Be careful what advice you listen to.
Your parents have half of everything right. They know how to make money, save some money (most of them), but they don’t know how to produce income.
I got into real estate so I could put my money to work for me. Your parents were never taught to invest their money in assets that produce income. They were taught to put it in a 401k or give it to Wall Street!
WORD OF CAUTION
Not all real estate makes you money. My first real estate deal was a single-family home. When the tenant moved out I had to sell the house just like my mom did after my dad died. The property taxes, the heating and cooling, the roof, the plumbing, that all comes out of my pocket. Everything is fine when someone is renting the place but I was relying on one tenant. Real estate that makes you money provides income every month—positive cash flow. Stay away from single-family homes, duplexes, quadplexes, and eightplexes. When someone is not renting your property, it’s up to you to cut the check. You’ll be the first to foreclose and will always be worried…
WHAT IS REAL FREEDOM?
Dave Ramsey says that if you have debt then you’re not free. I disagree; if you have to take care of something then you are not free. When things are coming out of your pocket like roofing, heating, and cooling, that makes you worry.
Not worrying about property taxes and having income every month gives you real freedom.
That’s why I buy apartments and office buildings—multiple tenants and more units equal more protection for you. If you think buying a 19 million-dollar home and renting it out is an investment, you’re wrong. That’s for super-rich people who have money to throw away. It’s dead money that isn’t producing income.
Get involved in income producing properties. Nothing is going to wipe out the fact that people have to have a place to live. A good deal gives you cash flow that pays you every month. Your first purchase should be 16 units, preferably 32 units. You’ll have to look at a hundred deals to find two that makes sense.
Cash flow is not bragging rights. It’s financial freedom. Make freedom your destination. Listen to my Real Estate podcast on iTunes or Stitcher.
