Is real estate investing sexy?
To own property? To rent out a property? To have property? To be the local person in the neighborhood that owns all this real estate?
Real estate is a very interesting product to own. People that own real estate either are very open about it.
They walk around and they say I own properties or they let people know that they’re interested in real estate. Maybe it’s because they’re trying to attract investors or deals.
Still, other people don’t want anyone to know that they own real estate.
It’s sort of like “The Millionaire Next Door”. These people might live in a normal house, have a normal car and yet owns ten, twenty or thirty properties or has a lot of investments and is a millionaire. This could be someone who runs a little real estate business or she runs a little real estate business but nobody knows about it.
The reason why I start out by asking is “real estate investing sexy?” is because you don’t want to hear too much about your real estate investment. You don’t want to hear too much about the fact that you own real estate investments.
You want to buy a property. You want to invest in a property, whether it’s with joint ventures or whether it’s by yourself. You want to get that property under title and you want to put renters in there. You want to advertise your property.
And you can do that by yourself or you do it use a property management company but it should be a very slow, very meticulous, very quiet kind of activity.
Real estate investing should not be sexy. It should be a very passive kind of way to earn an income.
The fact that you have renters in there means you should do due diligence on these renters. I’ve put another video out on what to look for when getting tenants.
You also want to make sure that the units are always rented. You want to make sure your properties are always being serviced properly and that it’s being maintained properly.
Whether you do that yourself or whether you do that with a property management company, is up to you.
Every little detail should be managed properly and should be watched over properly. You get renters. The renters pay you rent, regularly. If they don’t pay you the rent you should have a process in place to take care of that.
You get all the income and then you get all the expenses paid. You pay your mortgage; your mortgage and interest; your taxes; your insurance; and all the utilities that you’re responsible for; and any maintenance. You get a person to come in and do the regular maintenance on your properties. Depending on the arrangement you might have to get somebody in to mow the lawn and somebody to come in and plow the driveway in the winter.
All those little things should be a nice standard, slow, meticulous process. You could do that yourself or you can do that with a property manager.
Make sure all the finances are being managed. You have a bookkeeper or an accountant or both managing all the transactions at the end of the year. You have all your financial journals being managed. You should be looking at your properties every month, seeing which properties are cash flowing and which properties are not cashflow positive. And maybe I have to make some changes.
And maybe you’re investing in multi-family homes. You’ve got two or three or four units. How are those places cash flowing? Maybe you want to sell them?
You have to make sure you’re dealing with the right realtor or you’re selling it yourself and you put the right marketing in place. Make sure that when the property goes up for sale that you’ve done all the proper staging and you’ve done all the proper advertising and all the proper videos.
You need to become very diligent with the process and become very good at what you’re doing. But again, all this is very boring. It shouldn’t be sexy. This is not something you want to get heard about in the news about “how Jim Pelerin lost a hundred thousand dollars on these investments” or “how these tenants destroyed this property”.
You must treat your property and your real estate activities like a business. You must treat your tenants with respect and they will treat your property with respect.
So again, real estate investing shouldn’t be sexy. It’s not sexy. It’s a very mundane activity and hopefully, it will bring you good cash flow. And that’s from a rental perspective.
From a fix and flip perspective .. same kind of thing.
You hear all these horror stories about people buying homes and then they decide to make the renovations. They buy the home and the renovations end up costing twice as much as what they expected and they end up carrying the property for that much longer because they put it on a market and the market is slow. So instead of selling it in three months, they end up only selling it in six months. Or they end up not selling it and they have to convert it into a rental.
So now their whole business model of trying to do a flip every three months is gone.
So do your due diligence. Make sure that you’re dealing with people that know what they’re doing. Or make sure that you’ve got somebody that you’re working with that’s done this before.
Make sure that you get educated. Make sure you’re up to speed with all the skills that are needed. Everything from sales to marketing to project management to property management, accounting, bookkeeping. All those things.
Everything I’ve been saying so far is pretty boring, right.
So real estate investing is not sexy. It shouldn’t be sexy. It should be very very boring, but very very lucrative and very profitable.
If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast … then click this link jimpellerin.com/invest