Guest Blogger Rob X: Confessions of a Not-Broke Real Estate Investor
Rob X is a landlord with a “real job” who doesn’t want his full name used for reasons understood only in corporate America.
My name is Robert, and I’m a real estate investor association (REIA) member. I have a confession to make: I don’t want to quit my job.
I feel a little funny saying that, because it seems like an awful lot of the gurus, experts, and people around me at my local group would really, really like me to want to quit my job.
In fact, it seems like “job” is a 4-letter word around my REIA. A lot of people can’t even seem to say it: it’s a word so obscene that they have to spell it. J.O.B. Which, for those of you who haven’t caught on yet, means “Just Over Broke”.
The problem is, I’m not just over broke. Like millions of other Americans, I have a pretty good-paying job, with good benefits, and a credit score to match. I don’t hate what I do. I don’t feel oppressed by my bosses. I kind of like what I do for a living. I trained for it, I got good at it, and I enjoy it.
In other words, I’m not looking for real estate to fix my financial life; my financial life has been just fine for years.
I’m looking for real estate, and real estate-related assets, to KEEP my financial life fine when I retire, which I don’t expect will be especially early. Mid-50s sounds just peachy to me.
Did I mention that I like my job? I just don’t like the idea of taking a huge pay cut when I quit it. I want the last half of my life to be just as comfortable and prosperous as the first half.
I understand that I’m blessed, and that there are a lot of other real estate entrepreneurs who really do believe that having a job—or at least having THEIR job—is a problem to be solved as soon as possible by generating big chunks of quick cash with strategies like wholesaling and retailing.
But I’m not interested in those strategies, because I don’t want or need cash now. I want passive income. And I want it to come from assets that other people can manage. And I want it to really start rolling in when I’m ready to retire.
More money now is actually just a tax problem for me. More money later is a stress-free retirement. Yes, I just said that I want more money, but not now. Later.
And guess what? My local REIA has been a huge help to me in understanding how real estate can do that for me. It introduces me to other people who could help me do it—thank you, wholesalers. It makes me aware of possible pitfalls in my strategy, which has been to use my income and credit to get bank loans to buy rentals. When I tell people that I use my own money and credit to buy rentals, they sometimes look at me like I have 2 heads. That’s how unusual it is to hear someone say “I use my own money and credit” at my local group. But it happens all the time. And it’s so easy. So easy.
My local REIA has also kept me up on major changes, like when new laws or regulations are passed that affect how my property manager can screen or evict tenants. And it’s kept me up on smaller, but still crucial details, like who the best roofer in the area is and what colors tenants are going for in rentals.
For a few hundred bucks and 3-4 hours a month of my time to attend meetings, I get to become, and stay, an expert on what I do. I value that. A lot. Why? Because my whole career has been built on the idea that the more I learn, the more money I get paid. None of the other learning I’ve done has cost me JUST a few hundred bucks. And it’s meant a whole lot more than a few hours a month of my time, too.
But I wonder how many other white-collar investors like myself come to a meeting or two and decide that their local REIA isn’t for them at all?
A lot of the talk at meetings seems to be about creative financing techniques, which I’ll bother to learn about the day my banker stops calling me and offering me (more) money at better rates than she has before.
Or it’s about trying to get a $10,000 paycheck for flipping a house: a topic that I can’t relate to because all I can think is, “Why in the world would you want to SELL that great deal?? Do you know the tax benefits you’re walking away from?”
And when the topic does turn to landlording, I sometimes find that the discussion is all about how to do the cheapest work possible, and do it yourself. What I want to know is who is the right plumber to call, so I know the work’s done right, and I don’t have to do it at all.
Then there’s the whole J.O.B. thing. Seriously, I am NOT in denial. I actually do like my job, and I’m not sure how I feel about people sneering at it.
If you’re like me, let me give you some good reasons to keep coming back to your local REIA ANYWAY.
First, there are a lot more people at that meeting like you than think there are. Yes, the flippers are the loudest—they’ve got properties they need to sell and to get financed—but the people who just want to put their money and credit to work to get future income are there, too. And a lot of them have a lot of relevant experience to pass on to you that will cut years off your learning curve. Years. I know they did mine. You just have to talk to the people around you to figure out which ones are the seasoned passive investors and which ones are the newbies and the flippers (who are also useful, by the way).
Second, there are a lot of opportunities at your REIA for you to leverage your cash and credit into the deals of people who have the time and ambition to do the actual work. From buying deals from wholesalers to loaning money or partnering on rehabs, there are all sorts of hands-off, passive-income chances for your money to make money, and your REIA group brings those to your door.
Third, even “passive” investors need to understand their business. Want to lose a ton of money? Get sued because your property manager discriminated against an applicant, or because you weren’t carrying the right kind of insurance when that roofer fell off your roof. Or overpay for every repair because you don’t know what they SHOULD cost. Your local REIA is the place to learn about strategies you never even guessed were out there, and traps you didn’t know you should be looking to avoid.
The best reason of all? Because there are a lot of people just like you, sharing your interests and values, attending and actively participating in your local REIA. Nowhere else will you find so many like-minded, intelligent and willing-to-share investors on the planet. It’s a smart investment of time and money.
Don’t fall prey to the feeling that everyone at your local real estate investor association is “just over broke”. Some are, and they’re working hard to stop being that. But many are, quietly, looking for the same passive, long-term income you probably are.
Join. Show up. Participate. You won’t regret it.