I got into real estate investing about 10 years ago. For the grand cost total of nothing, I rented 8 books and 4 books on tape about real estate investing from my local library and took to heart the things that were consistent across all the resources and made sense to me. When I bought one of my first rentals, It needed lots of work. After work I would drive to my rental, change out of my khakis and button down, get the tools out of the trunk and work into the night on plumbing, painting, foundation, etc. A friend and co-worker who is a savvy investor asked me how the returns were and at the time I told him that it was like digging in the dirt for pennies. I was making money but my hourly rate was thin. However, I stayed with it and kept learning and working.
Once I accidentally left sprinklers running for several days and flooded one of my own basements and hated myself for awhile. I spent weeks and thousands on that rehab between water damage, and mold concerns:
I had a frozen pipe burst and got to do it all over again:
I even had to get creative once to get rid of about 40 hornets nests inside a backyard fence:
Learning How to Manage Your Business Investment
However, something else happened along the way. I got pretty good at it and I was keeping my expenses low by doing everything myself. I learned how to handle all kinds of repairs and issues, how to cashflow a property, and how to turn it quickly. I learned how to handle tenants and that treating people fair and honestly not only makes you feel good, it makes business easier and more profitable. I have now made hundreds of thousands of dollars of profit off of real estate and real estate will probably continue to be a proven way for resourceful hard working people to make a good side income but it is not the only one. I am not going to teach you how to invest in real estate because there are plenty of other resources for that and it is not something that I am really focused on taking on. However, I would like to comment on something broader.
Making Your Business Investment Pay Out
Every investment or business endeavor that I have ever undertaken is like digging in the dirt for pennies until….a money tree grows. Oh man, gag worthy, I know that analogy sounds too Tony Robbins or Rich Dad Poor Dad, but it is true and the analogy works really well. Picture it like this, I start with a rental and I hardly know what I am doing but I had enough sense to read a bunch and bought a $100K house that cashflows $5K per year after expenses (not very great but I got a tree sprouting). Then I learn how to keep my expenses down and what to do myself vs outsource. Then I optimize my turn time and have 0% vacancy so I am making 8% more per year. Then I wall off another bedroom from a huge unused dining room when the tenant leaves and rent goes up another $500 per month. Now I am making 16K cashflow every year off this house plus tax benefits and I have a system. I also bought at a good time in a good market and the house has appreciated 20-40%.
Maintaining Your Business Investments
Once that tree has grown all you have to do is monitor it and maybe trim it every once in awhile. Maybe you plant a few more and then you have a grove and you can monitor and trim them all at the same time. Adding a few more trees is not all that much more effort after all. But it started as digging in the dirt for pennies.
If it does not feel this way in the beginning, be wary, because it may be a scam or have a much higher risk profile than you can see. If it were easy immediately, everyone would be doing it because we all like money for nothing (according to the Dire Straits). You have to pick an area that is interesting to you and works for you and then dig in the dirt. Find someone who is good at it and ask for help, read a lot, and try to do your first foray in a way that involves acceptable risk. If you have a story of something that has worked for you, we would all love to hear it in the comments.
