I NEED BOOK RECOMMENDATIONS!!! First off, I school myself in everything and I’m good at it. I’m 27, and I need to get ahead FAST if I want to retire young and actually enjoy my time here on earth. My dad owns his own high end construction & remodeling company (Olson Construction). This line of work has been in my family for 5 generations. I’ve been doing remodeling my whole life. My Dad & I, we’re awesome at it. He comes highly recommended, advertises by word of mouth, does $30,000 remodeling jobs like its second nature that should be featured in magazines. That’s nice and all, but he’s 55 now and still swinging a hammer. Same with my two uncles. Hard work is something to be proud of, but I only live once. I don’t want to spend the only life I have working on someone Else’s giant house while they are on vacation. :banghead
I have an entrepreneur/business mind. I’m sick of doing the technical work like the rest of my family. My dad & I rehabbed 3 houses back in 2003/2004 and made about 100,000. Now that the real estate market had crashed, he’s stuck in “Paralysis through Analysis” mode. So, It’s my turn to step up and make something happen.
So In a couple months I’m starting ‘Olson Investments’. My poor dad had worked so hard to teach me everything he knows. I owe him so much for that. It’s time for me to give something back. His back and his hands hurt him now. I want to put myself in a position to acquire investment properties for us to rehab. My goal is to have 3 properties in the works at any given time, and a small crew for him to manage so he doesn’t have to get his hands dirty anymore. He deserves that before he retires.
I’ve read a lot of books so far on business & real estate. I’m hungry for knowledge. I’ve never been the type to play video games or watch TV. I listen to audio books for fun. And I’m sick of finding books on Real Estate Investing that seem to be exactly what I’m looking for, then finding out they were written in 2001. Right now, I have more free time then I’m going to have in a very long time. Can anybody help me? Book/Resource/Video Recommendations? Training courses that aren’t scams? A mentor? Anybody out there? :help
Hello OlsonInvestments In order to “retire” and be rich the common misconception is that it takes a lot of money. Everybody talks about being a millionaire. Most of my neighbors are millionaires but they are not rich. Money doesn’t make you rich income does. If you have enough passive income to cover your living expenses you are rich. There is more confusion around business ownership and self employment. When you buy and sell houses it is a work activity. You have just moved from doing one job to another. That is self employment but it is employment. You own a business (and are in position to be rich) when you have a business that when you look at the org chart that is no box with your name in it. You (as it says in Gerber’s book The e-myth) work on your business not in it. What that does it create a machine that does the activity and at the end of the month, quarter, year or whatever the frequency it writes you a check. That check is passive income and if that check is larger than your living expenses you my friend are rich.
The simplest (I said simple not easy) and fastest way to get there is to buy single family houses and rent them out. What I do is find houses that can be rented out yielding $200 or more per month. If my living expenses are $5,000/month then I only need 30 houses. If you build into the model maintenance and management fees your job is to go to the mail box get a check and cash it every month. Better still have the management company deposit the funds into your bank take your debit card and travel and anywhere in the world you find yourself just find an ATM and you have cash.
The problem with talking to people about real estate is that they think that if they buy a house fix it up and flip it every month making $15,000 they think that is more attractive than the plodding $5,000/month from 30 houses. The difference is if you flip a house a month you have to flip a house every month and can never retire. If you own you never have to work again unless you want to reorganize your business (refinances houses or replace a trouble house etc.)
This is a capitalist country. That means you either HAVE CAPITAL or you ARE CAPITAL. It is like in the movie Wall Street (I know I watch too much TV) the Michael Douglas Character Gordon Gekko said to the Charlie Sheen character Bud Fox “The richest one percent of this country owns half our country’s wealth. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons. I create nothing. I own.”
Can anybody help me? Book/Resource/Video Recommendations? Training courses that aren't scams? A mentor? Anybody out there?
Depends what you are looking to start your investing career doing. But if lease options interest you, I recommend Michael Carbonare over at The Naked Investor.
I understand the misconception, and you do bring up a good point. My general aim is not to be rich so please don’t lump me into the same category as the idiots that talk about wanting to be a millionaire but get nowhere. I have read the E-Myth, and it was very useful. What I’m trying to do is to apply the principles in the e-myth, with one of the big points from the book ‘Good to Great’ (good employees- my family). As my company gets to be more and more efficient, I want to apply what I learned from ‘Harvard Business Review- The 5 Stages of Small Business Growth’ and completely separate my involvement in the business. My goal is to someday work on the company, not in it. But I have to start somewhere. Your completely right about passive income, but I cannot achieve that until I move enough houses and build up enough capital to buy and own.
Also, we don’t ‘flip houses’. We do all our own plumbing, electrical, HVAC, drywall, flooring, painting, siding- you name it. My dad began as a builder when he was old enough to lift a hammer. So, we don’t make 15,000 on a single deal. We make between $30,000 to $50,000. We don’t subcontract anything out.
I have just finished my first complete whole house remodel. When It sells, I’ll have $30,000 of my own money, my dad is willing to put up $60,000 of his money totaling $90,000 between us which is more than enough. I’m going to ‘drive for dollars’ do my homework, and try to negotiate a good real estate deal worth investing in. You make your money when you buy the house, so to speak. In the meantime I’m putting together marketing materials. We have a few ‘millionaire’ clients that we have done work for and are good friends with who are perfect prospects to be private investors for future projects.
Olson,
Sounds like you are already on the right track with your start-up rehab business. You have the drive to make it work, and you have the skilled people.
I read the Harvard “5 Stages of Growth for Small Business” that you referenced, thanks for that tip. My Level III business is now in what I call homeostasis after 6+ years. I remember well Level I–the 7-day workweeks, the constant scrambling to get money for renovation, the first Chamber of Commerce meetings to market the business.
Now my furnished rental house business is in “pay off debt while maintaining current quality” mode.
My biggest advice for you: spend the time in the beginning on that most boring of jobs–setting up your accounting with an expert. Do this even before you start on that first home.
There is plenty of real estate advice on this site, hours and hours of reading. Focus on setting up accounting and how to pay employees correctly.
best thing to do is STOP reading and START doing. when u get in a pinch doing deal come here and ask for advice. there are a lot of knowledgeable folks here to help you. we all help each other. good luck to u. :biggrin
Team up with someone in your area who is actually doing these creative deals you want to do. Offer them something in return that will be worth their while like answering phone calls, putting up sign, posting free ads on Kijiji or Craigslist. Once that investor starts getting leads, ask if you can listen in on their calls (while you are on mute) so that you can hear how they are negotiating the deals out. This accomplishes a couple of things. It gets you networking with other investors and taking a load off of them. Secondly, you do some active learning by doing things that an investor normally does, all while seeing them actually putting deals together. Everybody wins. Lastly I’d highly recommend you get into some books that teach you the art of negotiating. Doesn’t matter how well you know a particular type of deal unless you know how to negotiate. Good luck with things.
Don’t make the mistake of getting too excited and PAYING TOO MUCH. Don’t be afraid of letting a deal go if the numbers aren’t what you want. Remember if you are going to to rehab houses don’t go beyond this formula. ARV (After Repaired Value) x 65% - cost of repairs - cost of borrowing money if needed = Your Maximum Allowable Offer (MAO). Don’t pay more than MAO and try to pay less so you can wholesale it to another investor if you have to.
I’ll take your advice on Negotiating. One thing I keep reading is that I need to learn how to sell to. Any book suggestions on either subject?
Teaming up with someone in my area is what I plan on doing next after I finish the project I’m working on now. Problem is, I’ve kept my eye out for someone, or a company, that does this. Any suggestions as to how, or where I can find one of these people?
Thank you all for your help. It’s greatly appreciated!