What a whirlwind of a month; hence my blogging absence. Pat started a new job one month ago, after working for CoBank for 10 years! Since then our lives have been hectic. While he’s now technically working from home, he has been out of town three of the last five weeks, which means I am double timing it. If you’re a single parent, you deserve daily accolades. It’s tough!
My office space is now our storage area in the basement, and when I actually make it down there, it’s quite nice sitting amongst the toilet paper, mac n’ cheese, toiletries, diapers and kids’ clothes. I also don’t have a window, so I’m constantly losing track of time. The other day I went to wake the girls from their naps; instead of the usual 4:30 p.m., it was 5:15!
When Pat and I started our real estate investing company toward the end of 2016 we never imagined it would lead to where we are today. The path we’re on is not what we expected or planned. We have learned so much over the past 2.5 years, and had we not taken that leap and challenged our mindsets we wouldn’t understand the depth of available opportunities.
Flip or Rent?
Our original goal was to start rehabbing distressed properties…become the next HGTV stars. 😉 We invested in a premiere real estate education program, drank the Kool-Aid and then drank through a firehose. We learned a ton and had enough education, coaches, mentors, and vendors in our network to be successful; however, the market in the Denver metro area was saturated with folks wanting to flip houses. The inexperienced investors were overpaying for anything and everything, and Pat and I weren’t willing to sacrifice our numbers to force a “deal” to work.
We turned to out-of-state, single family rental properties instead by leveraging my old 401K and Roth accounts and Pat’s old Navy account for two properties, and then used part of our Home Equity Line of Credit (HELOC) for another. The power of leverage is a wonderful thing, and once you start learning the possibilities you’ll want in the game too.
Why Flip a Couple When You Can Buy a Hundred?
At the beginning of the year, we also passively invested in a 101-unit apartment complex in Gulfport Mississippi. Simply put, we invested funds into an apartment syndication managed by someone else, and we receive checks every quarter for at least the next five years. Multi-family syndication is where we’d like to take our business, and given Pat’s background in banking and having done syndications for farm credit, we’re better postured than many. We further leveraged our HELOC for that one. Time and dedication are currently the biggest factors prohibiting us from sprinting, but our approach is slow and steady.
Want to Become a Real Estate Broker?
Apparently, I am a glutton for punishment. At the end of last year, I also got my real estate license. I went through Armbrust Real Estate Institute, a local real estate school, and it was one of the best decisions because they truly prepare their students. It was during that experience I realized how much I wanted to help folks because the majority of real estate professionals we had worked with in our personal transactions had really done us a disservice. I went to class five days a week and completed quizzes every night and hundred-question tests every Saturday for a couple of months. Pat spent a lot of time with the girls; it was grueling for him too. 😉
The real estate exam is not easy, and on the day of my big test, I sat down in the waiting room nervous as heck, and a couple of people sitting there with me were there for a second and third time. Talk about the “oh crap” feeling. It was a three-hour test, and I ended up passing both the state and national exams the first time around. Whewww! I conquered the world that moment, and then I drank a lot of wine. 😉
And let me tell you, after passing, you really don’t know as much as you think. The man, who would later become my advisor, told me, “You now have a license to get in trouble.” It’s so true! For those who think they can pass and get out and start buying and selling houses, it will be an uphill battle, if the intent is to actually be a good broker who can serve his/her clients justly.
I joined Keller Williams Realty, primarily for the training, mentoring and coaching programs. As a Keller Williams broker associate (or as my Armbrust instructor would say, “a broke ass”), I also had to join a REALTOR® board, which cost a pretty penny, but it’s worth it. As a REALTOR® you’re committed to a different set of standards and a Code of Ethics that isn’t required as a newly licensed broker, so I view it as a key differentiator.
I actually had my first listing appointment March 16! (Woot woot!) I am looking forward to working with this previous co-worker, and it’s an honor she chose me to represent her.
That Feeling…Where’d All Our Money Go?
With any new endeavor, there are a lot of upfront costs (or investments). For example, if you’re interested in getting licensed as a real estate broker, get ready to spend around $3k just to get started. No, that doesn’t include your marketing costs or those expensive yard signs either. We’ve hemorrhaged money over the past couple of years, but we’re starting to see results now. It’s all about mindset.
If you’re going to throw a wad of money at anything, make sure you can see a real and quantifiable return. It’s never good to hope your money will work for you either. Annnnnnd, should something happen, and you lose it, it can’t be detrimental to your financial situation. Do your research, know who you’re working with, and commit, even if you don’t come out of the gate sprinting.
We have learned a ton, and there’s still so much more. If you’re interested in learning or have questions, reach out to Pat or me. We’re always happy to share our experiences and refer you to experts in the business. Some think we’re crazy, and I am sure our families fear for our investment choices sometimes because they’re not what corporate America preaches. In fact, it’s not what anyone preaches. Personal finances and investments are not taught through our traditional education system. Most of what we learn comes from our parents who were also failed by that same system. In order to do something different, you have to step outside your comfort zone, learn and take action. A good starting point would be to read “Rich Dad Poor Dad,” by Robert Kiyosaki. That book has been life changing for many.
I hope you found this post educational. If you’re in real estate, what have you learned throughout the journey? Please share, so others can learn.
