Let’s be clear . . . - Posted by JoeKaiser
Posted by JoeKaiser on February 19, 2001 at 16:01:38:
Real estate is an investment vehicle for the vast majority of real estate investors, and that’s fine. I occassionally hang onto the better properties we purchase and sometimes even bury a few bucks in the process.
You probably don’t need an “investment vehicle” at the moment . . . you need to make some money first. How’s it done? Not by taking good money (real dollars) and turning it into equity (dollars buried into real estate investments).
Forget about spending money to make money. Put the dough in your pocket as a rainy day fund, and go out and put a deal or two together using nothing but your brain. That’s how deals get done and you get paid.
A few years ago I sold all my tools, and yes, I had a bunch. When you have tools in the garage, you’re often tempted to jump into a repair job to save the hassle of farming the thing out. Heck, I’d even run out to a new purchase with my weedeater in tow just to get the thing done before my ad was due to come out that weekend. Dumb.
At some point you begin to understand that it’s really not the money in your pocket or the tools in your garage that matter. It turns out that it’s really just your ability to get those things figured out and handled that determines whether or not you succeed.
So, forget about the dough. Instead, decide now that instead of taking the easy way out, you’ll do whatever it takes to figure out how to make things happen without cash, credit, (or tools). You do that and you’ll be in business.
Like Monique and Phil suggest, your money is better spent in other places, like education and marketing.
Here’s how it really works when you’ve got things set up. Got a call last week from a real estate agent who’d been contacted by an old childhood friend. She’d inherited a local property but she herself now lives out of state. He didn’t want to deal with it because of the earlier relationship, so he passed it onto us (he knows we can buy quickly, with cash).
A couple phone calls gets a deed prepared (I used to do that), gets the purchase financed (I used to do that), gets the house prehabbed (I used to do that), gets the landscaping cleaned up (I used to do that), and gets the realtor lined up to market it (I used to do that - not the agent thing, the marketing thing).
House will be on the market in a month or so, but I’m already on to the next one (and was able to pull $25k out of this property instantly . . . but that’s another story). Now, I’m not naive enough to think my job is finished. I know there will be lots of things I have to do before this thing gets sold and we get paid (but I guarentee it’s not even 5% of the time and trouble I used to put into this sort of thing). See why it beats the heck out of swingin a hammer for months on end to get a rehab finished where just breaking even is like my biggest goal in life?
Spend your time figuring things out instead of working on the darn properties. Decide on a gameplan that lets you make use of your most valuable asset, that eight pound lump on the top of your neck, and get that thing hard wired with all the necessary elements in place. You do that and all of a sudden doing a half dozen properties or more every month is a real possiblity, as is putting a few bucks into your pocket.
Forget rentals, forget notes. Get down to the basics and go pound pavement. Get your name and phone number into the hands of people who are “hot to go” (motivated sellers) and good things will happen.