Goals and Success Habits for Your Real Estate Strategy

Having set goals is a great way to give yourself a clear benchmark for success. For example, if you know how much money you want to make next year from real estate investing, that gives you a realistic target you can work towards every single day. Goals are a way for you to track your overall progress, and they can also push you to work harder and force you to augment your knowledge of the market. This is especially true when it comes to developing successful real estate strategies.

Tips for Investors and More

As I started out in this industry, I quickly realized there were certain skills and abilities I had to hone in order to be successful. Knowing how to build a team, when to take action, present myself as an authentic and real person, and look back at my failures helped me grow immensely. These are all skills that can be developed over time. Once you know the key characteristics of real estate investing, entrepreneurship, or fame (whatever it is you’re seeking), you will then be able to create good long-term habits.

If you’re looking for real estate investment tips, look no further. With me, you will be able to develop the skills and techniques necessary for becoming a successful investor. If you want to learn more about how to set attainable goals, or you want help creating your own real estate strategies, apply today!

The Complete Guide to Saving Money While Investing

The Complete Guide to Saving Money While Investing

For most people, it’s important to keep saving money, even while you’re investing. After all, while your investments are a way for you to plan for your future and build your portfolio, you never know when you might need an emergency fund, or some savings tucked away.

When you’re trying to balance your income between expenses, savings, and investments, however, things can start to get difficult. That’s why it’s important to know some critical savings tips that will help you stay on top of your finances, even while you’re pursuing investment opportunities. Here’s what you need to know.

Start by paying yourself.

With every paycheck or direct deposit, it’s easy to start racking up the costs. While this may vary depending on your spending habits and monthly expenses, it’s often easy to push your saving money to the back of the priorities list. After all, when you’re done paying for groceries, utilities, and mortgage expenses, you still want enough money left over, right? But, in most cases, hitting a firm savings goal means finding the right balance. That’s why it’s important to pay yourself first.

Every time you get a paycheck, take a portion of that and immediately place it in your savings account or emergency fund. Otherwise, it’s harder to keep your monthly savings consistent if you leave all your money in your checking account. When you really want to hit a savings goal, the best way is to prioritize savings as much as you can.

Depending on your financial situation, it’s often a good idea to set up automatic bank account transfers. This is an easy way to consistently set aside a small amount of extra cash on each payday.

Plan for unexpected expenses.

Planning for an unplanned expense seems a bit oxymoronic. However, while you might not be able to plan for a specific dollar amount, you can save a general sum of money to give yourself a bit of a safety net in the event of any unplanned expenses, job loss, or financial hardship.

Often, when someone’s facing a financial crisis, the temptation is to forgo ongoing investments in favor of immediate funds. However, with an emergency fund, you don’t necessarily have to compromise your long-term financial stability to pay for medical bills, home repairs, and unexpected emergencies.

Many financial experts agree that your rainy-day fund should account for roughly three to six months of expenses. While you can certainly add extra money or less money, having an emergency fund is a great option to supplement retirement funds, savings, and investment accounts. Again, if you don’t want to spend a lot of time creating a separate account for your emergency fund, automatic transfers might be a good option for your needs. Since a string of unexpected events can impact your financial health, your saving money in an emergency account is a great way to protect yourself in the long run while you continue to build wealth.

Consider a side hustle.

At this point, the side hustle is officially a United States institution. Whether you’re working on getting your credit score to a good place or you’re using a financial planner to help you choose a high-yield savings account, a side hustle or part-time job can go a long way toward helping you meet your financial goals. Plus, as more U.S. industries continue to lift in-person restrictions and encourage business, this is one of the easiest ways to take the next step in your financial journey.

You can take whatever amount of money you earn from your side hustle, passive income opportunity, or part-time job and put it toward your retirement savings, high-yield savings, or another investment or financial product.

If a part-time job isn’t your style, you may want to consider selling things you no longer need. The first step is to look through your belongings, decide what’s worth selling, and list it online. For a simple way to sell clothing and accessories, you can consider popular resale sites. For furniture, decor, and other possessions, you might want to consider local resale groups.

Try to pay off your debts aggressively.

If you have credit card debt, a loan at your financial institution, or any other high-interest debt, it can make it that much harder to build an emergency savings fund and continue investing in your future. It can also limit how much money you put into your online banks and accounts. If you find that your existing debts eat into your general savings goals, you might want to consider prioritizing loan and credit card payments. In some cases, you may want to work with a financial advisor to review your credit report and see what debt you should prioritize. This can help you eliminate high-interest debt, which frees up more resources to dedicate to your investments.

Understand your investment costs.

Every mutual fund, CD, and broker service has its own costs that you need to understand. Whether you’re talking about a retirement savings account or your supplemental investments, it’s a good idea to weigh the costs against your returns; this can help you make better decisions that benefit your overall financial well-being.

For instance, say you’re on a workplace retirement savings plan. If your employer-based plan is too expensive, you may want to consider contributing to the match and then seeking external investment opportunities. As long as you stick within your general investment plan, this can improve your financial fitness.

Are you ready to master saving money while investing?

At Goodegg, we have experience working with investors at all skill levels, and we always think it’s best when you take the time to set and review your financial goals truly. So, whether you need to reconsider your subscriptions and gym membership or you need to diversify your investments to better align with your long-term plans, prioritizing your savings growth and overall financial health is a smart choice. With the right investment decisions, you have the potential to hit your financial milestones that much faster.

If you’re looking for the right partnership, you should consider joining the Goodegg Investor’s Club. With our industry expertise, we give you insight into savings tips, investment strategies, and growth tools that can help you succeed.

 

About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/

 

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5 Bad Habits That Are Costing You Money When Investing

5 Bad Habits That Are Costing You Money When Investing

If you want to know how to save money, it’s also important that you understand how not to save money. While you can follow top investing tips, read blogs, and listen to industry-leading podcasts, it won’t help you hit your investment and savings goals if your bad habits are costing you money.

The difficult part is that, oftentimes, we don’t even know when we have these bad habits, let alone how we can break them. Whether you follow the stock market, invest in real estate, buy mutual funds, or you’re trying to build a more robust savings account, bad habits can harm your finances in the long run.

Whether you struggle with financial temptation or rely on credit cards a little too much, here are a few bad financial habits that can cost you money when you’re investing.

1. You spend more than you earn.

It’s a poorly kept secret that credit cards and credit lines often lead to vicious cycles. It often goes like this: You start by spending a bit too much of your paycheck. Then, to navigate ongoing expenses and costs, you have to rely on your credit card. Unfortunately, this traps you into high-interest-rate debt. This can derail savings goals, eat up your paychecks, and cost you a lot of money over the years. So, if you’re ready to start investing, the best way to hit your financial goals is to stop spending more than you earn.

Often, this means you need to sit down and review your spending habits and how those align with your long-term goals. Start by looking at your spending over the last year and how much money you have in your bank account. In some cases, a great way to hit your savings goals and continue investing is to cut down on unnecessary expenses. These include retailer subscriptions (such as Amazon Prime or your gym membership), credit card debt, and discretionary spending. You can also set a tighter budget for your groceries, use more coupons, and look for discounts. It’s a great option that often equates to “free money” in a sense.

For some people, however, this may even mean that you need to earn more money. If you don’t have enough money to tackle your credit card debt, invest in a retirement plan, and consider index funds or individual stocks, you need to find ways to earn money. A simple way is to invest in a part-time job or a side hustle. This will impact the amount of money you make in the short term and help you grow your portfolio in the long term.

2. You’re not prepared for emergencies.

If you don’t have an emergency fund, it’s a good idea to set one up. Even if you have automatic savings and a robust retirement plan, there are plenty of ways that unexpected expenses can derail your savings account, short-term goals, and financial success. At a minimum, many financial advisors and experts recommend saving a few months’ worth of expenses to navigate job loss, medical bills, or other emergency expenses. Then, if you have to replace your water heater or pay unplanned utility expenses, you’ll be prepared.

While you don’t need to contribute to this account at regular intervals, you should always review it at regular intervals, determine when it needs more or less money, and take note of your account averages.

3. You’re missing out on tax breaks.

If you’re not using the right financial products for your taxable income, it might be time to hire a financial planner and review your past performance regularly. Often, your tax refund is the easiest way to find additional money each year. With an experienced financial advisor, you can find tax break opportunities and get a good deal on your tax return each year. This helps preserve your hard work during each fiscal year and helps you reap the rewards in the near future.

The government even offers tax-advantaged accounts that are great for someone looking to build a diversified portfolio. They offer IRA (individual retirement account) and 401(k) options. It’s a good idea to review your current retirement savings and taxable brokerage account to ensure that it’s helping you build wealth. If not, it won’t require a lot of time to correct, though this should be your top priority.

4. You tap into your retirement accounts too early.

The bottom line is that a little bit of greed now can cause you a lot of grief in the next year. A sound piece of financial advice: Don’t pull from your retirement savings accounts unless you absolutely have to. You shouldn’t treat a retirement account like a payday advance opportunity. Even if you’re using that money to purchase financial products or look into the real estate marketplace or stock market investing, you’ll still face higher interest rate penalties. You also miss out on those financial growth opportunities.

The first thing you need to keep in mind about these accounts is that you should leave your money invested at all costs. Unless you have no other options for securing funds, this route carries too much volatility, and it can take you a long time to rebuild. If you’re facing true financial hardship over the course of a year, you may want to reach out to a professional in the financial world to discuss early withdrawal options.

5. You’re impatient with diversification.

An easy way to cost yourself money while investing is to get impatient. While nobody has a great time watching a low-cost index fund or a Roth IRA underperform, you need to focus on the essentials and your portfolio’s overall goals. The downside is that it’s understandably difficult to stay the course, but you must do your due diligence and avoid tinkering with your portfolio in a reactionary way.

Next Steps

If you’re ready to learn more about how to manage your finances while you’re investing, the first step is to join the Goodegg Investor’s Club. With helpful insights on anything involving U.S. investing, from equity to ETFs, the Goodegg team can help you ditch your bad financial habits and invest in financial products that can help you hit your goals.

 

 

About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/

 

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5 Colorado Travel Tips for the 2022 Best Ever Conference

5 Colorado Travel Tips for the 2022 Best Ever Conference

Who’s ready for some après ski? Best Ever Conference attendees often use the conference as an opportunity to vacation in Colorado either before or after the conference. It’s truly the perfect winter adventure to get your team together before or after the BEC, or even for inviting your family and friends to join. Let’s face it, this past year has caused us to pause many of our vacation plans, and we’re all eager to get back out and create some exciting experiences. With that in mind, we’ve put together our top Colorado travel tips to help you make the most of your stay.

 

1. Pack your gear.

If you are planning on venturing outside of Denver, don’t forget to pack your snowboard, skiing, or sledding gear. Some of the most popular ski resort towns in the world are located in Colorado such as Aspen, Breckenridge, Keystone, Telluride, and Vail. These ski towns offer incredible resorts located close to town, as well as shopping, restaurants, and other winter activities.

 

2. Book early.

It’s certainly not too early to book your ticket and travel plans for the upcoming BEC. You won’t want to catch a case of travel FOMO by skipping out on your opportunity to secure your spot and travel accommodations. Hotels and vacation rentals start booking in the summer for the upcoming winter season, and since this year is the year of travel, many vacationers are securing their winter lodging already — especially the ski-in/ski-out homes.

 

3. Remember your lift tickets!

In addition to booking your stay, it is highly recommended to book your lift tickets in advance as their prices are expected to increase throughout the year. Those who purchase lift tickets early always receive the best discounts, and they avoid the risk of waiting until the resorts sell out.

 

4. Explore Denver.

Interested in staying local in Denver? There’s plenty to experience in the Mile High City. Did you know Denver brews more beer than any other city? Denver’s downtown area offers a wide variety of brewpubs, eclectic restaurants, and world-class galleries and museums. Another popular location to explore is the artsy hotspot neighborhood River North Art District (RiNo).

 

5. Snag an exclusive resort discount.

The BEC is offering limited exclusive discounted rates at the Gaylord Rockies Resort for attendees. The Gaylord is extremely convenient for travel as it is just minutes from Denver International Airport. The rustic resort is the perfect retreat for a winter vacation — indulge in tranquility at the resort spa, indoor and outdoor water complex, and lazy river, and soak in the picture-perfect views of the nearby Rocky Mountains.

 

There is so much to look forward to this winter at the BEC, and with these Colorado travel tips in your back pocket, you’re sure to have an incredible time both in and outside of the conference. Secure your spot today by visiting besteverconference.com.

 

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Growing Overseas with Jennifer Bourdeau

Growing Overseas with Jennifer Bourdeau

For some professionals, the opportunity to relocate for a career is an exciting next step on their path to success. However, when Jennifer Bourdeau chose not to relocate for her career in the hotel industry, it led to an even more fulfilling adventure. She had always wanted to obtain an MBA degree, and with a reluctance to move for her job, she decided that the time to earn it was now.

 

Education Abroad

Accelerating her timeline, Jennifer Bourdeau started evaluating MBA programs, not only across the United States but across the globe. She enjoyed travel and realized that she might as well create an experience as she furthered her education. Jennifer landed on a year-long intensive MBA program located in Nice, France. Eleven years later, she remains based in the South of France where she is building her career and future.

“I decided to stay. I thought, ‘Okay. Let me give it a go. I will stay in France and try to find a job,’” Jennifer reflected. “I ultimately found a great job working in the travel industry, but in technology for travel.”

 

Financial Clarity

Jennifer Bourdeau was focused on building her professional acumen and career in France as a business consultant in product marketing, working with teams all across the globe. Throughout this period of growth, she sat down to examine her finances, which she was convinced weren’t enough.

“I took a look at my finances, and I realized that I had financial clarity. I thought, ‘Wow! I’m in a good position.’ Before that, I had always had this scarcity mindset. I didn’t have enough money. I needed to keep saving it,” Jennifer said. “I realized that I’m pretty comfortable right now and I can take some risks. And this aggressive saving that I had been doing had given me some options. One of the options was to say, ‘You know what? I’m going to take a break from the corporate world and try out something new.’”

 

Becoming a Full-Time Investor

At the end of June, Jennifer Bourdeau will be transitioning out of her corporate role and into a role that is solely focused on generating wealth and allowing her to make the most of her time: a full-time real estate investor.

Real estate was something that Jennifer dabbled in before leaving the United States. In 2007, she purchased a home that had significant equity in it. To ensure that she could continue owning it, unbeknownst to Jennifer, she started house hacking to pay the mortgage. Since then, her passion for real estate has only grown.

“When I moved to France, I became a passive landlord. I just rented the whole property with a property manager. I’ve done two new-build villas. We’ve also rented them seasonally. So that created quite a bit of income and a bit of work as well on our side to manage those rentals,” Jennifer shared. “I like active investing because it’s a direct reward and a direct reflection of my efforts. So every penny that is made, it’s because I did something well. Every penny that’s lost is because I did something wrong.”

 

Building a Team

Last year, Jennifer Bourdeau continued to diversify her real estate portfolio by investing in multifamily syndications. As she started in this new arena of investment, she realized that she needed to surround herself with individuals and operators who would help fill in the gaps in her real estate savvy.

“When I discovered passive investing, I had no team. I was so clueless. So I just consumed as much content as I could. I spent a really good amount of time upfront educating myself and learning who the players were in this space,” Jennifer said. “And from there, I started to create a little network. I discovered some investor groups. That is my team— these other investors.”

 

A Better Path to Success

Jennifer’s investor network is now more than one thousand people strong, with several hundred actively engaged in providing insight and best practices along the way.

“Now, my aim is more about creating wealth without creating a job. It’s been valuable to have insights and expertise and learning through sophisticated, experienced investors,” Jennifer reflected. “I just became disillusioned with this boomer’s dream where you go to college, you get a job, you buy a house, you get married, you stay dedicated to a company for so long, and then you retire at 65. I just realized there was a different way, a different path to get where I want.”

 

 

About the Author:

Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com

 

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Learn From These 6 Investing Mistakes

Learn From These 6 Investing Mistakes

While real estate investing can be incredibly lucrative, these investments come with the risk of moderate or even significant financial loss. Often, investing mistakes are tough lessons that come with a high price tag, but you don’t necessarily have to learn those lessons through your own experiences.

United Property Group Founder Dan Gorman has been investing in real estate for more than 22 years, and he has purchased more than $50 million in commercial real estate. Currently, he owns apartments, office space, and a few restaurants. While Gorman has enjoyed incredible success as an investor, he has also lost an extensive amount of money through mistakes with multifamily and commercial real estate. What can you learn from Dan Gorman?

 

1. Trusting Others With Skin in the Game

When Gorman reflects on some of his biggest financial losses and investing mistakes, he attributes them to not understanding the deals fully and relying on the advice of others. For example, many years ago, he was under contract to purchase a 120-unit apartment complex. The deal was complicated with financing involving bonds, low-income tax credits, and other unique sources of capital. Gorman admits that he did not understand the deal fully. He relied on the advice of others who told him it would be a profitable deal, but those individuals all stood to profit from the transaction. Gorman believes that they were advising him with their own agendas in mind.

Before closing, Gorman rightfully got cold feet. He tried to back out even though he stood to lose a large chunk of money at that stage in the transaction, but his attorney advised him that he could be sued for not following through. Ultimately, Gorman went through with the deal, and he lost a substantial amount of money for many years on end until he sold the property recently.

 

2. Failing to Understand the Transaction

Gorman recalls specifically asking his real estate attorney about one key aspect of the transaction, and his attorney could not explain that component of the transaction to him. In hindsight, Gorman realized that if an attorney who works with real estate transactions on a daily basis could not understand the structure, this should have been a red flag.

He warns others never to get involved with land contracts, lease options, bond financing, and other situations that are over their head. Take the time to understand all aspects of the transaction fully before committing to it.

 

3. Relying on Projections

This particular project was a rehabilitation project that involved putting $2.5 million into the property. The rents were below market value with a two-bedroom unit at the time renting for $650. The projection used by underwriting was $750 per month for these units. Gorman’s attorney advised him that the underwriting projections were too aggressive and that they may not be realistic.

Initially, Gorman saw dollar signs and ignored his attorney’s advice. However, he realized as the closing date approached that his attorney may have been right. This realization came too late because Gorman already had $250,000 of hard money invested in the deal. He has learned to use conservative, realistic projections that are based on actual market data.

 

4. Failing to Understand Contract Terminology

Ultimately, the 2008 real estate crisis led Gorman to go into default on the apartment complex. While he was not behind on payments, the lender backed out of the financing. The only option he realistically had was to file for bankruptcy. However, even though the multifamily property was owned in a protected entity, the bankruptcy triggered defaults in other investments that Gorman owned. Essentially, this one bad deal triggered the collapse of his investment portfolio.

 

5. Not Understanding the Tax Implications

In addition to dealing with the ramifications of bankruptcy and losing money on this 120-unit multifamily complex transaction, Dan Gorman was hit with a huge tax bill when he ultimately sold the property 15 years later. While he sold the property for exactly what he paid for it, he realized a net profit of $1.5 million. This was a surprise to him, and he states that he still does not fully understand how the calculation was made. Because of this net profit, however, he is now struggling to find a way to mitigate his tax liability with only a few months left in the tax year.

 

6. Overlooking Building Permits

This is not the only project that has provided Gorman with major life lessons. One of the more recent lessons that he has learned is tied to an office building that he rehabbed. He met with the building inspector and an official from the fire department to discuss his plans for the project, and they both told him to move forward with it. Through a miscommunication, Gorman believed that a permit was not required to do the work. Now, he is backtracking in an attempt to pull together all of the documents related to the permit. Unfortunately, this opened up a can of worms related to maximum occupancy, usage, and more. The project seemed fairly straightforward initially, but it has become overly complicated because he is dealing with the permit application process midstream.

 

Through his investing mistakes, Dan Gorman believes that residential real estate is easier to invest in than commercial real estate, but both require diligence. He is happy to discuss his investing mistakes with others in the hope that they may learn from them. At the same time, he acknowledges that he still has lessons to learn. Nonetheless, the mistakes that he has made have made him a more conservative, cautious investor.

 

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Managing Up With Jonathan Ghaly

Managing Up With Jonathan Ghaly

As he looked back on his real estate career, Jonathan Ghaly realized that he first worked for a syndicator before he started doing deals with one. In the mid-2000s, Jonathan got hired as a property manager for a 100-unit apartment building. On his first day, he was handed a keychain full of keys and a cell phone that rang non-stop.

Around 2007, the syndicator started to take risky gambles, unbeknownst to the tenants. He began to take on additional investors while subsequently not paying down the mortgage. With the economic crash, the syndicator turned all of the properties into foreclosure, leaving Jonathan to find his next steps.

 

Early Success

“I learned a lot. He introduced me to ‘Rich Dad, Poor Dad,’ and the cash flow game. I saw his mistakes, of course,” Jonathan recalled. “During the crash, I had my real estate license already, and no one was hiring. So I just said, ‘Well, I might as well try to sell real estate.’”

Jonathan’s real estate career started to flourish. He started with two deals his first year and steadily grew upwards. In 2013, he transitioned from only selling properties to buying properties of his own.

“I partnered with a friend because I was just too scared to pull the trigger in the beginning, and we bought eight units together,” Jonathan said. “I bought him out a few years later, and then I just kept buying more.”

 

Coffee Talks

Today, Jonathan’s portfolio consists of 15 rental properties and an assisted living facility, in addition to his investment in multifamily syndications. Reflecting on the community of people who helped elevate him to this place, he said it all started with one friend and a morning coffee session.

“I felt the need to call a friend of mine who I had helped buy his first couple of properties. He was a teacher and he quit to be a fix-and-flipper. I said, ‘I would love to just talk about this stuff — what we’re doing and what to invest in and what not to invest in — with you. Would you have any interest in meeting on Thursday mornings and having coffee at my house?’” Jonathan shared. “He said, ‘Perfect. My kids go to school right near there. I’ll drop them off and come over.’ This beautiful friendship came out of that, and we put everything on the table as far as investment stuff.”

Jonathan’s inner circle of like-minded investors continued to grow larger, with others interested in their open and honest discussion of real estate and real life.

“These investor-mentor meetings or inner circle meetings are amazing, even if it’s once a month. After my experience with it, I would highly recommend it to any investor because you never know what good can come out of it,” Jonathan said.

 

Shifting the Game Plan

Even with a trustworthy network, Jonathan Ghaly believes that the work is never done with self-education and believing in your own intuition on a deal.

“Experience is a big word in the industry. But even with that, a lot of people can have experience but still go through a protocol. So, are you like a machine just going through protocol without common sense? Or do you really understand real estate where you can get creative, and you can see through these blind spots? Because it’s all about shifting the game plan. Keep educating yourself in real estate, and don’t get distracted,” Jonathan shared. “I can get really distracted, but when I do all this research about these other things, I come back and realize it doesn’t beat the real estate return.”

 

The Importance of Trust

Reflecting on his journey to date, Jonathan Ghaly believes that the fundamental element of any successful real estate partnership is similar to that of marriage: trust. While some things are learned the hard way, it’s essential to surround yourself with a team that complements your strengths and can compensate for your weaknesses.

“Find a partner you can trust with your life because it is a marriage. I find myself constantly partnering with people who are exactly like me,” Jonathan said. “We should build our teams up so that the strengths and weaknesses, and skills and non-skills, are really evening out and covering everything across the board.”

 

 

About the Author:

Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com

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How Anthony Chara Scaled His Business From 10 Single-Family Homes to 1600+ Apartment Units

How Anthony Chara Scaled His Business From 10 Single-Family Homes to 1600+ Apartment Units

Anthony Chara impressively increased the size of his business from nearly a decade of looking after single-family homes to overseeing more than 1,600 apartment units spread across the country. Of course, telling Anthony’s story includes sharing investing tips and interesting experiences; however, according to Chara, it all ultimately comes down to one thing: not giving up.

As he mentioned in a recent interview, the most important thing that an investor can do — and the most important thing that people in all walks of life can do —is push past roadblocks and learn from the setbacks we all experience from time to time. The learning that is done during these times is invaluable.

How Did It All Come Together?

Anthony Chara’s housing story started in 1993 when he and his wife moved to a different home but continued owning their former residence and rented it out. That gradually increased to 10 of those types of homes until, eight or nine years later, he started learning and putting into practice new strategies such as fixing and flipping homes and engaging in wholesale deals. He soon realized that doing those things was a combination of hard work and considerable rewards.

He entered the apartment aspect of real estate for the first time in 2003 and quickly discovered that the rent checks that he was receiving from those units were significant, particularly in cumulation but also individually in many cases as compared to single-family homes that he had worked with in the past. In the years that have followed, he has been in business with several 100+ unit complexes with the largest at 410, and this has now become his investing focus.

Working With Insurance Companies

One thing every real estate investor needs to take into account is that it is generally not easy to get insurance companies to pay out what they should when they should — for example, when covered properties are damaged in a hurricane. Anthony Chara learned this firsthand when a hurricane damaged a property that he owned in Panama City, Florida. However, it helped to have a public adjuster looking to ensure that the amount paid out was appropriate given the policy and the incident.

He added that ensuring that you have the right type of coverage prior to events such as these is also a must and, conversely, it can prove to be tremendously damaging from a financial perspective if you do not. He is thankful that he had solid hurricane protection for this property located in a hurricane-prone area.

Benefits and Challenges of HAP and HUD

Anthony Chara has also experienced benefits and challenges from working with the United States Department of Housing and Urban Development (HUD)’s Housing Assistance Program (HAP). One of the most significant benefits that he pointed out is that units that are associated with HAP are ones that he receives steady money from, even if they are empty.

However, many of those who are individual buyers or part of a syndication who want to take advantage of that will need to get a HUD loan; a bridge loan may be part of or a substitute for that process.

Also, consider other issues that could arise when working with HUD. For example, a manager who was working for Chara’s syndicate was blacklisted by HUD for repairs that the individual had overseen at a previous property. That resulted in months being spent on rectifying the situation, on the extensive related paperwork, and on hiring a new manager, a period that was partially extended because HUD must interview and confirm any candidates. In the meantime, HAP-related funds were not being paid.

Chara added that other HAP-related issues can also lead to funding being cut. These issues can include dissatisfaction with the condition of the property or how it is being taken care of. Since this is a relatively unpredictable aspect of the arrangement, it is something that an investor should take into account. As a result, Chara said that a good balance for him is to have about 30% of his units under a HAP contract.

It is also important to consider HAP’s voucher program, which is not as immersive. For example, a renter with a voucher will go to complexes that they like and ask if their voucher will be accepted. Although owners of contracted units have a say in who will live there, HAP employees typically end up making the selections.

What Should Go Into a Pre-Purchase Inspection?

One of the most significant ways to earn more money or, more to the point, not lose more money in the big picture is to inspect properties that are being considered and think of issues that may arise in the years to come. Things to look for, according to Anthony Chara, include the drainage in the area. For example, is there somewhere for rainfall and melting of snow to go? It’s also important to inspect the condition of parking lots, roofs, furnaces, air conditioners, mold, and insects. For example, ensure that asphalt parking lots are regularly sealed and restriped so that they do not turn to gravel and mush as the latter prospect results in a much more significant financial burden than the former one does.

Simply put, being as proactive as possible about things such as these will help investors better scale their real estate business and continue to grow their income.

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7/13—How to Find Good Investments When Prices Are High and Markets Are Competitive

How to Find Good Investments When Prices Are High and Markets Are Competitive

How’s this for a success story? In just the last five years, Steve O’Brien and his team at Atlanta-based Arcan Capital have acquired more than 20 multifamily properties. Together, these assets are worth more than $300 million. How has Steve, Arcan Capital’s co-founder and chief investment officer, prospered in such a hugely competitive marketplace?

Well, Steve’s boiled his strategies down to four main pieces of advice. These tips should help you get ahead in the exciting but extremely crowded real estate industry.

 

1. Maintain Your Reputation

To start with, Steve stresses how building a stellar reputation takes a long time, but the results are priceless.

In the real estate community, many brokers and sellers know each other well. And many people discuss the firms they’ve worked with openly and candidly.

Therefore, it’s vital that, when you promise to do something, you actually do it. For example, don’t ever make a bid if you’re not sure you can afford it. If you follow through every time, people in the industry will know it soon enough.

Imagine that you bid on a deal, but two other real estate companies place higher bids. If those two companies are new and relatively unknown — or even worse, if their reputations are weaker than yours — it’s very possible that you’ll win that deal despite your lower bid.

 

2. Data, Data, Data

The only way to build a strong reputation is to really know what you’re doing. And the only way to know what you’re doing is to have thorough and accurate data.

Before you bid on a property, learn as much as you can about it. Study the local renting market as well. What are local renting habits like? What are area renters willing to pay for various options?

On top of that, you should be familiar with practically every contractor in the region. How much do they charge? How does their work compare? Which of them provides realistic quotes?

You should also get permission to tour the property with a trusted contractor. That way, you can find out what renovations are needed and how much they’ll cost.

Similarly, get to know as many maintenance professionals in the vicinity as possible. You’ll want to consult with a few of them to see how much it’ll cost each year to maintain the property.

Consequently, you can make data-driven decisions about which properties will pay off and how much to bid for them. You can be sure that many of your competitors won’t make such insightful choices.

You can also impress sellers and potential investors with the facts you discover during your research stage. For instance, it might be obvious that a certain property needs new windows. However, a contractor could tell you exactly what kind of window and what type of glass would be best.

Later on, when you describe those ideal windows to the seller and to people who might make investments, they’ll probably be impressed. They’ll see that you really know your stuff. And, once again, you’ll gain a distinct competitive advantage.

 

3. Be Honest With Investors

Of course, your investors are key to putting your deals together. And they definitely have lots of options when it comes to residential and commercial real estate. That’s why you should always take care to strengthen your investor relations.

If these people believe that you respect them and care about their opinions, they’re much more likely to partner with you again and again. After all, that kind of relationship isn’t necessarily common in the real estate business.

Therefore, be straightforward about your expectations for each deal. Never oversell. If you explain that, due to current market realities, a certain deal might yield lower returns than previous deals, most of your investors will appreciate your honesty.

Likewise, don’t take any investments for granted. Maybe there’s someone who’s been investing with you for a long time, and that person is always enthusiastic about your work. Even so, don’t assume this investor will automatically go along with your next deal. Instead, sell them on it as though you were collaborating for the first time.

In addition, you can use different methods to keep the lines of communication open. Business reports, informational newsletters, and phone calls are all great ways to keep your investors connected and updated, even when you don’t have a deal to pitch.

 

4. Go Your Own Way

Whenever you can, look for properties with less competition for ownership. You might find, for instance, that dozens of firms are trying to buy one multifamily home, yet there’s a multifamily residence nearby with a less competitive amount bidders. If so, consider that less popular alternative.

The second property may need more renovation or maintenance work. Maybe its estimated return on investment isn’t as high as some investors would like. However, you might be able to get it at a low price. And, if you have relationships with contractors and maintenance pros who’ll give you good deals, you could see healthy profits from that purchase.

This approach is known as the blue ocean strategy: seeking discounts and low-demand options in order to claim new slices of the increasingly competitive market.

 

As you can see, Steve O’Brien’s real estate triumphs have nothing to do with luck. Instead, Steve has grown his company through copious research, informed decisions, honest investor relationships, a reputation for reliability, and the occasional quest for less sought-after properties. These strategies can ultimately benefit anyone seeking to develop a competitive edge in their chosen industry.

 

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Steps to Stop Trading Your Time For Money with Kris Benson

Steps to Stop Trading Your Time For Money with Kris Benson

Kris Benson is like many other investors who are getting their feet wet with residential properties. He dreamed of generating enough passive income from a small empire of residential properties to pay the bills. However, on his journey toward making this dream a reality, he discovered a more efficient and effective way to make far more money through real estate investments.

Today, Kris Benson is the CIO for Reliant Investments, which is part of Reliant Real Estate Management. However, his incredible story began many years ago when he was a sales professional for a payroll processing company, ADP.

 

Growing Up on the Fast Track

Kris Benson did not intend to settle down with a wife and kids early in life. An unexpected pregnancy in his early 20s may not have been in the plans, but this was a pivotal moment in his life. This blessing in disguise actually caused Benson to put his nose to the grindstone very early on, and this ultimately took him on a path toward passive investing. In fact, if he has any regrets, it is that he did not start investing in passive income streams even earlier.

He initially worked for ADP, and he later transitioned to a sales job at Intuitive Surgical. Benson worked long hours and had the same thought that so many other people have. He wanted to stop trading his valuable time for money. The solution that he came up with was to build a solid stream of passive income. While Benson could have started a business, he understood that he was not creative enough to walk along that path. Investing in rental properties was the clear option.

 

Amassing a Small Empire of Duplexes

Benson’s initial investment goal was to slowly build a solid portfolio of two-unit residential properties. He figured that if he had 25 buildings that were producing $200 per unit per month, he and his wife could live a comfortable life without the need for a 9-to-5 job. After he had 22 units across 11 properties, however, he realized this plan was not going to work for him. Even with a great management team in place, he did not want to deal with the stressful hassles associated with residential tenants. He also did not want to endure the stress of purchasing many additional duplexes.

He and his wife decided to divest. They ultimately sold all but one of the buildings. The property that they continue to own is one that Benson’s brother currently lives in. At this point, Benson had capital available to invest, and he was looking for a more effective way to generate passive income.

 

Co-Developing an Apartment Complex

Benson made the move that many others make when they gain more experience and have more investment capital. He decided to invest in an apartment complex. While he does not recall where he heard the advice, he attributes this move to the idea that big deals and small deals require the same amount of effort and time. The difference is that you make less money on small deals. Essentially, Benson believed that the return on an apartment complex would be more aligned with his output.

He teamed up with a partner who he knew from his childhood. While his partner was a construction expert, Benson was the capital investor. The pair built a large apartment complex in four phases. Initially, the project required Benson to put out a $200,000 investment. However, a shortfall in planning required him to front another $270,000 after the first phase was complete. When only a quarter of the property was constructed, he was already committed for almost a half-million dollars. However, he says he never thought about not following through with the other three phases. They made up some of the initial phase’s overage on future phases, and Benson recouped the majority of his capital later through refinances.

 

Transitioning to Storage Investments

Finding additional multifamily investment opportunities was a challenge for Benson. Through his research, he decided to pursue self-storage properties. Specifically, the National Association of REIT Data indicated that self-storage properties had a 17% annual return for the 23-year period between 1994 and 2017. This is compared to a 13% annual return for apartment complexes during that same time period.

Kris Benson used a storage industry publication issued by MiniCo to research the top self-storage operators in the country. MiniCo’s publication listed the top 100 operators, and he personally reached out to the top 30 operators on the list to find investment opportunities. This was how he connected with Reliant Investments. Specifically, he met with Todd Allen, who is one of Reliant’s principal partners. Todd was responsible for finding investors, but he preferred to manage operations. With Benson’s strong background in sales, he was the perfect individual to join the team and head up the equity committee.

He proactively structured a deal with them that allowed him to earn equity in the properties for those he assembled investors for. This ultimately transitioned into an extensive amount of passive income for Benson and his wife. On top of that, Benson also joined the company officially as its CIO.

 

Reflecting on the Past

As he reflects on the past, Benson attributes his success to several pivotal points. While he was stressed by his duplexes, he does not regret starting his journey with them. Getting started is often one of the most difficult parts of real estate investments and investing in his duplexes got the wheels moving in the right direction. He also states that his most successful investment to date is the apartment complex. If he were to give advice to a new investor, that advice would be to educate yourself as much as possible. However, you also need to jump in at some point and be prepared to learn more along the way.

 

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Big Goals in the Big Apple With Melissa Jameson

Big Goals in the Big Apple With Melissa Jameson

With big goals for her professional development and real estate portfolio, Melissa Jameson shares how nurturing the growth in others has helped her thrive in both.

 

On the Move

After growing up in Connecticut, Melissa Jameson decided it was time for a total change of scenery. She moved to California to earn an undergraduate degree in political science from the University of San Diego before crossing the continent again to land in Washington, D.C., where she would work on Capitol Hill while also obtaining her master’s degree from George Washington University.

While in Washington, D.C., Melissa earned a job as an advisor to the Department of Justice, where she worked closely with the FBI and DEA on money laundering investigations. She continued to excel in a constantly evolving field, providing investigative support and specialized knowledge to support active federal criminal cases and help the government “follow the money.” That is, until 2014 when an opportunity presented itself to join PricewaterhouseCoopers’ Financial Crimes practice in New York City— somewhere she had always dreamed of living.

 

Becoming a Real Estate Investor

With her new job away from Washington, D.C., she could now focus on other opportunities. A family property was Melissa’s first entry into real estate and where she started developing a genuine interest in the potential of real estate investments for wealth generation.

“I had always been interested in real estate and then ended up with this family property that I decided to renovate and rent out. And as I started to do that, I realized there’s definitely more money to be made in real estate, and I got my feet wet,” Melissa said. “I realized lots of people were making a lot of money in real estate. I can be doing something here, too, even though I’m obviously working a full-time job. I started getting an interest in buying other properties to rent out, so I started actively investing in Atlanta. I also started passively investing, partnering with operators investing in high-growth areas in the U.S.”

 

Keys to Success

As Melissa has continued to grow her real estate portfolio, she realized that many skills fluidly transfer between the corporate world and the world of a real estate investor.

“Having good mentors is really important, and personally, I’m still trying to develop those mentoring relationships in the real estate industry. I have those mentors more on the corporate side, just because I’ve been in the industry for so long,” Melissa shared. “The network and mentors, in particular, can be so helpful because you can bounce ideas off of them and potentially avoid making the same mistakes.”

Learning from the past is another foundational element that drives Melissa’s investment strategy. In her formative years, she didn’t have financial role models in her life. Healthy money management wasn’t practiced or discussed.

Taking the Lead

Today, she is looking ahead and lives her life in a way that positions herself for a secure financial future, focusing on building a portfolio of diverse financial investments, and taking calculated risks.

“If other people can do this, other people are making money off of it; I had that confidence in myself that I can, too,” Melissa said. “I’m not perfect. I’m still learning and making some mistakes along the way, but it’s just that I have that confidence in myself that I can really learn, that I can make the connection and that I can be successful in this industry.”

With confidence comes support, and whether it is in the professional realm or with a team of fellow real estate investors, giving support is a fundamental element of every successful team. For Melissa, it’s essential to how she’s grown and managed her own team to ensure their continuous success.

“I love leading people. I’m really passionate about it because I like to see people grow and develop, and I love mentoring, building relationships, and building that trust,” Melissa reflected. “At the end of the day, we all want to succeed and we all have the same objective, so I want to make my team feel like I really support them and that I’ll do whatever I can to really help them in whatever ways they need.”

 

 

About the Author:

Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com 

 

 

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Real Estate Lessons From the Ralph Lauren Story

Real Estate Lessons From the Ralph Lauren Story

I have a unique topic to share with you. You might be wondering from the title, what does Ralph Lauren have to do with real estate? Is he a real estate investor? Did he write a real estate book? Not exactly.

I’ve been reading a lot of biographies lately. Greenlights by Matthew McConaughey, Can’t Hurt Me by David Goggins, and most recently the story of Ralph Lauren: Genuine, Authentic by Michael Gross. The reason I wrote this blog is to highlight a few parallels between Ralph Lauren’s story (the story of building his fashion brand) and investing in real estate. My hope is that you find these lessons impactful and inspirational.

Before we begin, let me ask you a question: When you think about long-term investing, what comes to mind? For me, I think of building something generational. Some people use the term generational wealth.

Said another way, what does money mean to you? If you had a billion dollars in your bank account tomorrow, what does it mean? What would you convert the money into? Would you travel more? Spend more time with family? Be more charitable? Buy exotic cars and houses? Everybody is different — but what would you do?

These are big questions, so we will come back to them at the end of the blog. For now, let’s explore some of the takeaways from Ralph Lauren’s story and relate them to real estate.

 

Leverage Other People’s Expertise to Build a Team

Ralph Lauren is a master at building teams. Did you know Ralph Lauren never went to design school? He didn’t go to college to be a fabric or clothing designer. He doesn’t even do his own sketches for design concepts. What’s the lesson?

Ralph leverages a team of experts who work at their own highest and best capacity to run his company and create designs. Ralph has a gift for finding inspiration and he’s a visionary; in other words, he has the “eye” for design. I’m not underplaying his talent; I am highlighting that he’s built a team and he focuses on his own highest and best potential. He outsources the majority of the other tasks to free up his time.

You and I can do the same in real estate. Take investing in apartment syndication for example. If you are not the expert in all areas of real estate or do not wish to do all the work, you can simply partner with teams who are experts in underwriting, finding off-market deals, property management, construction, and technical analysis. You might consider this investment model so you can focus on your highest and best potential. That’s the lesson; real estate and business are team sports. What role do you want to play in the team? You have a choice.

 

Think Alternatively

Ralph Lauren went against the grain in terms of the fashion industry. In the 1960s, he took a look at what everyone else was doing and he chose to go in a different direction. This same concept can be applied to investing. Most people are investing based on their parents’ advice, mainstream marketing, billboards, and TV advertisements. These outlets mostly suggest that you follow the herd and turn your money over to Wall Street. In other words, put your money in a 401(k) or IRA, and buy annuities, stocks, bonds, and mutual funds. There’s nothing inherently wrong with these investments. As many of you know, I used to work for a very large, well-known brokerage firm to learn this type of investing and stack it up against real estate. You may find, as I did, that there are sometimes superior investment vehicles in the alternative sector.

To think “alternatively” in terms of investing is to think private real estate, private businesses, precious metals, oil and gas master limited partnerships, and so on — typically, investments that are not publicly traded. There are thousands of investment options outside the world of Wall Street.

Ralph Lauren never set out to be a “grand designer.” He didn’t say to himself at an early age, “I’m going to launch a mega clothing line one day.” In fact, he refers to himself and his company as “anti-fashion.” Going against the grain, thinking alternatively, and finding your own way can often be the best approach. As poet Robert Frost might add, “I took the [road] less traveled by, and that has made all the difference.”

 

Start Simple, Then Build From Your Foundation — the Key Is to Start

Ralph Lauren started with a simple idea. He was observing men’s fashion in the 1960s. At the time (generally speaking), everybody was conforming to a standard gray or black suit and black or neutral colored tie. Most everyone shopped at the big box retailers, and there wasn’t much of a “designer’s touch” in men’s fashion.

Ralph started his business by creating a men’s necktie. In the 1960s, men’s ties were typically two-and-a-half inches wide. Skinny ties — think about the TV show Mad Men. Ralph decided to mix things up and he created a four-inch-wide necktie, nearly twice as wide as the industry standard. He also added vibrant colors, patterns, and designs to top it off. Bloomingdale’s (a major NYC retailer) took a gamble and partnered with Ralph Lauren and, lo and behold, the neckties sold. Then customers started realizing, “If I have this necktie that’s vibrant and colorful, I need a new dress shirt that goes with it.” So, Ralph started making men’s dress shirts. Then his customers had a new shirt and new tie — why, they needed a new suit to go with them, right? He expanded into the suit business. And so it began.

As we know, Ralph Lauren today has expanded into women’s clothing, home décor, perfumes and colognes, activewear, watches, and the list goes on. It has become a mega-company, but it has taken decades to get there. The lesson is to take action; start with a single step forward.

How does one begin investing in real estate? Some prefer to start with buying shares of a publicly traded REIT (Real Estate Investment Trust) for as little as $10 per share. I use that number for example purposes, of course — each REIT will be priced differently. Some may be $10 a share, $20 per share, $100 per share; it depends on the company. The point is, it doesn’t take millions of dollars to get started. In fact, this is what my nephews are doing to start their passive income journey, and they’re starting in their teenage years, which is incredible… if they keep it going.

You could invest in single-family homes. This might require $25,000 to $50,000 in the form of a down payment. You could house hack (rent spare bedrooms), flip it, turn it into a vacation rental, or purchase a buy-and-hold rental. You could also invest in real estate syndications as I do. You may have to come up with $50,000 to $100,000 to invest in a private placement offering; however, the passive benefits may be worth it. The bottom line is that everybody is different. Everybody has a different risk tolerance. Do what makes sense to you, start with what you’re comfortable with, evaluate your risk tolerance, and leverage licensed advisors if you need help making a decision or strategizing.

The takeaway is that building a business or investing in real estate is not an overnight success. It can take decades to get where you want to be. The key is to start your foundation, then build from your foundation.

 

Setbacks Are Part of Life — Be a Realist

This next lesson is not as pleasant, but it is necessary to discuss. Setbacks are part of life. There was a point in the 1970s when Ralph Lauren almost lost the business and nearly went bankrupt. It came at a point of rapid expansion. You would think from the outside looking in, that the company was doing great, but the inventory, overhead, and payroll began to exceed the cash flow of the business.

Hopefully, if you and I are investing in cash-flowing real estate, we’re not taking on such risk. At least not that of a venture capitalist running a startup company. There will always be hurdles and setbacks with investing, in business, and in life. There’s always a recession around the corner and not every deal you invest in is going to be a home run. In fact, you might lose money in some deals. That is why diversification is so important. Just be a realist. In other words, you and I can’t bank on consistent 10–15 percent returns for the next 50 years; it doesn’t work that way. Since we know there will be setbacks, let’s plan for them. As Warren Buffett’s business partner Charlie Munger says, “Prepare for the worst, hope for the best.” He refers to himself as a “cheerful pessimist.” Excellent billionaire advice.

 

Design Your Own Path and Live It

The final lesson that I want to share with you is to design your own path and live it. This is one of the most inspirational takeaways from Ralph Lauren’s story. What did he actually do? Ralph Lauren created a lifestyle image for his brand, similar to that of a Hollywood film. He designed an imaginary lifestyle of romance, freedom, abundance, optimism, and a vision of the American Dream, and he sold that vision to his customers. The most inspiring part came after decades of creating this fantasy lifestyle. Ralph began living that lifestyle in real life.

If you have ever seen Ralph Lauren, he wears his own brand, he lives in the houses you see in the photoshoots, and he drives the collector cars you see in the ads. Genuine and authentic. That is the beauty of it all, and also why I’m so passionate about teaching you and others about the benefits of investing for passive income. The purpose is not about money, it is about designing the life that you want to live.

At the beginning of this blog, we explored what money means to you. What would you do if you had time freedom? In other words, if you freed up your time by generating more passive income each month compared to your monthly expenses. I encourage you to get started on your passive income journey if you haven’t already. Get started with designing your life. A life on your terms.

Thank you for tuning in and reading this blog. I don’t blog much anymore, but when I do, it comes from inspiration, passion, and the desire to help you achieve your goals. I hope you found these takeaways and lessons inspirational, impactful and valuable. Until next time…

 

 

To Your Success,

Travis Watts

 

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Breaking Down the Deferred Sales Trust into 5 Steps  

Breaking Down the Deferred Sales Trust into 5 Steps  

If this is your first time reading about the other “DST,” which you may have thought was a Delaware Statutory Trust, you may want to clarify how to set one of these up. Thankfully, a  Deferred Sales Trust™ offers a unique way to sell highly appreciated assets of any kind and create a cash flow wealth plan, unlike the Delaware Statutory Trust.

The proven tax deferral strategy known as The Deferred Sales Trust offers you debt freedom, liquidity, diversification, optimal timing, and movement of wealth outside of your taxable estate, all without using a 1031 exchange. Armed with this information and insight, you can invest and build wealth like never before.

How does one create a Deferred Sales Trust? The answer is in the following 5 steps:

 

1. Hire a Trusted Professional to Sell Your Highly Appreciated Asset

When selling any of the below assets, you will want a trusted professional in your corner who has a track record of providing value to clients.

  • The sale of a primary residence
  • The sales of active investment real estate (this includes saving failed 1031 exchanges)
  • The sale of a business
  • The sale of cryptocurrency or stock (public or private)
  • The sale of artwork, collectibles, or rare automobiles
  • The sales of carried interest
  • The sale of GP or LP positions in your existing syndications
  • The sale of any kind of asset that is subject to U.S. capital gains tax

Many business professionals across that nation have partnered with Capital Gains Tax Solutions, which offers their clients an option when it comes to capital gains tax strategy using the Deferred Sales Trust.

2. Schedule a No-Cost Consultation With a Capital Gains Tax Solutions Trustee

Before you put your highly appreciated asset on the market, schedule a free consultation with an exclusive DST Trustee to see if the DST would be a good option. During this meeting, the Trustee will help you evaluate using the Deferred Sales Trust to sell your highly appreciated asset, hear your story, understand your financial goals, and answer any questions you may have. The minimum size deal is $1 million net proceeds and $1 million gain.

 

3. Meet with the DST Tax Attorney, Your Advisors, Trustee, and Estate Planning Team Financial Advisor

The main purpose of this meeting is to take a deeper look into using the Deferred Sales Trust to sell your highly appreciated asset with the following core members of the DST’s Estate Planning Team:

  • DST Tax Attorney
  • Independent Certified DST Trustee
  • Registered Investment Advisor (approved member of the Estate Planning Team)

You can also invite others to this meeting, including your:

  • CPA
  • Financial Advisor
  • Real Estate Broker
  • Business Broker
  • Independent Attorney

Collectively, the Estate Planning Team will cover the viability of using a DST for the sale of your appreciated asset, review your financial goals, establish your risk tolerance for investments, and determine the payment amounts you want to receive after the close of the DST. Assuming a DST is a good fit and you are ready to move forward, the tax attorney will create the Deferred Sales Trust and Capital Gains Tax Solutions Team will work with all other parties (escrow, attorneys, real estate agent, business broker, etc.) during the sales transaction.

 

4. Selling Your Asset to the DST

Upon selling your asset to the Deferred Sales Trust, the sale proceeds will be placed in the created DST Trust, and you will not recognize immediate capital gains tax since you did not take constructive or actual receipt of the cash. It’s similar to a 1031 exchange in this respect. It’s important to understand that, at this point in the transaction, you have now transferred all your rights, title, and interests in the asset to the trust. However, you will only do this if the ultimate buyer (the third party in this transaction) is ready to purchase the asset from the DST immediately.

 

5. You Receive an Installment Contract, Also Known as a “Promissory Note”

For the sale of your asset to the Deferred Sales Trust, Brett Swarts, your Capital Gains Tax Solutions Deferred Sales Trust Trustee, will give you a Secured Promissory Note, which lays out the payment plan. This includes what amount is owed to you, the interest you are charging the DST, the amount of payment set to pay you, and the specific dates of each payment. In other words, you have become a lender to the DST.

 

Post-Closing

Upon closing, your third-party unrelated Independent Trustee manages all aspects of the DST. However, this is only as and when you authorize them. For example, upon sale of the asset you just sold to the DST, the Trustee has the funds placed in the DST’s secure bank account that requires signatures from both of you, as well as the bank officer, to open. This is like a long-term escrow account. With your approval, this will be the account from which he buys investments you authorize and will have the bank make payments to you per the terms of your installment contract.

 

Capital Gains Tax Solutions Case Study:
Shea Sells His Business and Builds 70+ Multifamily Units in Tennessee

Steps to Shea Using the Deferred Sales Trust

  1. Shea sold his marketing business for $2.6M. (did not qualify for a 1031 exchange)
  2. Funds were sent to the Deferred Sales Trust (DST) Bank Account, including an extra $600,000 of tax-deferred capital gains.
  3. Some of the funds were invested into the active new construction of 70+ units in Tennessee, which he is building with his partner.

 

Two Questions to Determine If the DST Is a Good Fit For You

1. Do you have highly appreciated assets of any kind you would like to sell, defer the tax, diversify the funds, and invest the funds into real estate or securities, all tax-deferred?

2. What would it mean to you to convert your highly appreciated asset — which may not be producing cash flow of any kind — to cash flow from passive or active real estate?

 

Happy investing! Want to dig in more? Check out Why You Should Consider Using the Deferred Sales Trust (DST) Now More Than Ever.

 

Bonus Video: The Biggest Thing to Overcome for the Deferred Sales Trust with David Sloan

 

 

About Brett Swarts:

Brett Swarts is considered one of the most well-rounded Capital Gains Tax Deferral Experts and informative speakers in the U.S. He is the Founder of Capital Gains Tax Solutions and host of the Capital Gains Tax Solutions podcast.

 

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Boost Your Investment Growth in 2022 With the Best Ever Conference

Boost Your Investment Growth in 2022 With the Best Ever Conference

It’s official — the Best Ever Conference is going to be back in person and better than ever in 2022 in Denver, Colorado.

Attendees will have the opportunity to take full advantage of engaging keynotes, workshops, and networking with top real estate investors and innovators, all while forming long-lasting relationships with other high-quality attendees.

Investors eager to boost their growth in 2022 will want to mark their calendars for this game-changing event.

We asked Hunter Thompson, Managing Principal of Asym Capital, to share his thoughts on the Best Ever Conference. “There’s a part of me that wants to try to say, ‘It isn’t REALLY the best ever!’ but, you know what — it actually is,” he said. “When it comes to the caliber of the speakers, the networking opportunities, and the overall energy of the event, it just might be the ‘Best Ever!’”

Hunter added, “If I’m going to take the time out of my schedule to travel to a conference, it needs to be a five-star experience. Best Ever never fails to deliver on that requirement, which is why I attend every year.”

Purchasing a ticket today will allow attendees access to monthly virtual group discussions known as Mini Masterminds, which have already started. These Mini Masterminds provide the opportunity to immediately begin connecting with other attendees and continuously build relationships prior to meeting in person at the conference.

The BEC three-day agenda is going to be packed with next-level value and opportunities for growth. Not one day will be the same.

Want to elevate the experience? There is a limited amount of VIP tickets available. These tickets include everything in General Admission, plus additional exclusive opportunities to meet conference speakers, attend private social events, and more.

To purchase your ticket today, visit besteverconference.com.

 

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The Family Treatment with Nelson Long

The Family Treatment with Nelson Long

Cultivating a manufacturing business that is three generations strong, Nelson Long shares how building a team that lasts is just like creating an extension of family.

 

Family Legacy

In 1986, Nelson Long’s father and uncle set out to create a superior attachment for loaders on farm and utility tractors. Their vision came to life with the production of the Hydro-Jaw 4N1 Bucket, and with it, W.R. Long, Inc. Manufacturing was born. For the next 35 years, they would continue to innovate while establishing a robust dealer network all over the United States.

It wasn’t until 2004 when Nelson came to work at W.R. Long. Today, his father has retired, and Nelson is the CEO responsible for making the decisions to set the company up for long-term success, not only for future generations but for the other employees in the company.

 

A Fresh Perspective

As Nelson stepped into the CEO role, his Christian faith inspired him to think differently about the way he wanted to run the business.

“When my father retired, I made a shift to thinking about my employees like a family,” Nelson shared. “I’m treating my business as a ministry and I do what I can to give them a better work environment and to help them out if they have different needs. We’ve got policies for vacation and things like that, but if there’s a certain situation that comes up, we work with them.”

 

Caring in a Crisis

No more significant situation could have been anticipated than the global COVID-19 pandemic. When faced with keeping his employees safe and healthy but protecting their livelihood, Nelson kept the business intact while ensuring his employees were paid for a full 40 hours per week.

“We broke our company up into two shifts. We had shift A work one week, shift B work the other week. What we were thinking was, if someone got sick, it would only potentially affect half the crew, but not the whole crew,” Nelson said. “We were trying to continue our business. We did that for a while, and I paid them all, still, their 40 hours a week, if they were here or not. And we did not apply for government money, or anything like that, because I felt like it was my responsibility to take care of my employees.”

 

A Thoughtful Approach to Hiring

Over the last 17 years, Nelson has learned many lessons, both good and bad, about growing teams. In reflecting on growing his business to 35 employees, a Dave Ramsey concept has remained Nelson’s single most important piece of advice when it comes to developing his office staff.

“The hiring process is incredibly important, and you should go way, way, way overboard during your hiring process to make sure everything’s just right. I did not do that earlier, and I’m doing that much more now,” Nelson shared.

“Spend way more time in the initial hiring process than you really think you need to. Meet their family and ask them if they’d like to go out to dinner. I’ve taken my wife out to dinner with the prospective employee and those kinds of things to get her thoughts on it also.”

 

Forming a New Team

Nelson began evaluating options to establish financial freedom and diversify from 401(k) and stock market investments in preparation for retirement. In finding syndications, he realized the need to establish a new team, equally requiring comfort and rapport.

“I don’t personally know any of the people who I’ve invested in. So I’ve got to find out, how do I become comfortable with them?” Nelson said. “If the investment is something that I can understand fully, and I understand it clearly enough that I could explain it to my wife, and she can understand it — that’s a go for me. So, if she doesn’t understand it or she’s not comfortable with it, I’m not going to pursue it.”

 

Looking Ahead

The future of W.R. Long is now in its third generation, as Nelson’s son joined the business in 2020 and is learning alongside his father to continue the legacy that was started almost four decades ago.

“I never pushed him to come. I never told him he needed to, or anything like that. He’s a computer engineer and he had a great career, but he didn’t have as much influence at his previous company as he could have here,” Nelson said. “And now that he’s here, I’ve been grooming him to run the company.”

 

About the Author:

Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com

 

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The Path to Profit: From Airbnb to Commercial Real Estate Enterprise With Rock Thomas

The Path to Profit: From Airbnb to Real Estate Enterprise With Rock Thomas

If you’re an aspiring property investor but are not ready to buy, you might think you should wait. With the right strategy, however, you can start investing now. We spoke with Montreal-based investor Arvin “Rock” Thomas, who shared his investment wisdom about an opportunity waiting in plain sight.

 

About Rock Thomas

Rock Thomas has built a real estate enterprise that earns over one billion dollars yearly. He has steadily grown the business despite economic and personal challenges. As a neuro-linguistic programming (NLP) practitioner and champion of motivational thought, Rock models a remarkable level of self-discipline.

 

Start in real estate without purchasing property.

Rock stumbled into a lucrative answer to this conundrum when renting out his house while traveling. To his surprise, people paid up to $1,000 per night to stay in his residence located in a ski area. He soon realized Airbnb was a path to profiting from real estate you don’t own.

Unlike multifamily or apartment investing, a short-term rental venture doesn’t require a steep initial investment. The key is to find a residential property in a desirable location. Then, you lease the property from a willing owner and manage the rental as a business.

Your upfront costs include the lease and furnishing the unit. Expect ongoing expenses for utilities and maintenance. Unless you can manage it yourself, you’ll want to budget for cleaning and repair experts.

If Airbnb is potentially so lucrative, why isn’t everyone doing it? Rock stresses the importance of treating it as a business and employing strategy and humility.

To succeed, you want to mind these steps:

  • Find owners willing to let you sublease.
  • Do your homework on the market.
  • Partner with more experienced investors.
  • Master your mind.

 

Get owners on board.

How do you convince a property owner to let you lease the unit for your short-term rental business? Rock notes you should expect to knock on many doors and refine your pitch as you go. Your primary selling point is that the arrangement benefits owners.

As the lessee, you’ll keep the unit in top condition and curate all occupants. You’ll handle normal wear and tear, turnover, and minor repairs without disturbing the landlord. The landlord gains a stress-free experience with guaranteed rent and pristine property.

To successfully woo owners, focus on extracting lessons learned from each encounter. What went well, and what fell flat? You’ll improve your transactions by objectively evaluating them and committing to improving.

 

Do your homework.

Rock emphasizes that success means doing your homework on properties and having a team and system in place. As with any property, location is critical. Units close to public transportation, colleges, and hospitals will attract renters. Unless you have trusted local partners, start near your home so you can manage the rental in person.

You’ll also want to consider the timing. Long weekends are the most popular, and you may struggle to fill the middle of the week. However, urban properties close to employment and tourist spots can draw steady customers.

 

Know your data.

To know what you’re taking on financially, you need to run the numbers. Rock and his team analyze opportunities using a sophisticated system not available to most people. The system helps set daily prices based on fluctuating demand. If you’re considering a property, the software can provide projection data to help you decide.

What if you’re crunching your own data? Rock recommends checking similar listings neighboring your property’s location. Enter different date ranges and other variables to evaluate price and demand. You may be tempted to price low to get a renter, but you could leave hundreds or even thousands on the table by not educating yourself first.

 

Partner with experience.

Rock learned this pricing lesson firsthand, along with the importance of mentorship, when beginning investing. He rented his house for $300 per night to an eager renter and passed on the investing course his friend was teaching. The actual nightly value was $600 to $1,000, so Rock left far more money on the table than the cost of the course.

Rock’s takeaway? Invest in learning from experts, and you’ll make fewer mistakes and escalate your game.

If you’re not handy with maintenance and repair, you’ll want a dependable maintenance expert on call. Handling minor repairs promptly is essential to an excellent tenant experience and fast unit turnover.

Consider how you’ll address common issues such as renters locking themselves out in the middle of the night. For example, remote-controlled keyless entry lets you unlock the front door or garage from wherever you are. In addition, make sure your renters can quickly reach you at any time for home emergencies.

 

Mind your headspace.

As a successful business owner dedicated to personal development, Rock has some candid words of wisdom for the rest of us. Growing up on a farm taught him resourcefulness, a fierce work ethic, and the value of a morning routine.

He notes that many people expend far more energy wishing for different circumstances than doing anything about them. So instead of having gratitude for what the universe has provided, people send the message that its bounty isn’t good enough. As a result, they miss opportunities and live joylessly.

If you aren’t doing so already, stick with a beneficial morning routine to propel the day’s success. For example, Rock starts his day with pushups to remind himself that his mind controls his body.

The bottom line is that to improve your professional performance, first control your mind. As a new investor, you want to start with good data and self-management basics. This way, you’ll prime your short-term rental venture for long-term success.

 

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Reasons You Should Rethink Saving for Retirement

Reasons You Should Rethink Saving for Retirement

Whether you’re hoping to become financially independent now or if you’re wanting financial independence when you’re ready to retire, the conventional methods to save for retirement will do little to get you there.

We spoke with Daniel Ameduri from Future Money Trends about his book, Don’t Save for Retirement. He gave us some of his best secrets for saving for the future and working your way to financial freedom. Daniel is out to disrupt the system and he was happy to share some of his best strategies with us.

Don’t Save for Retirement?

For most of us, when we were fresh out of college and entering our first jobs, we signed up for conventional savings plans like 401(k)s, mutual funds, and ETFs. We’re told that these plans are the best way to ensure our futures and make sure we’re taken care of in our senior years.

But these plans aren’t designed to bring wealth to the beneficiary and benefit those running the industry. There’s no way to get wealthy with these plans, nor is there a guarantee that you’ll even get enough money to live comfortably after you retire.

Daniel suggests taking your capital and investing in something that yields income. He thinks that investing in real estate is a much better way to build up savings for when you retire. You’ll create a passive income for yourself and be able to grow your wealth instead of waiting to see what you’ll get from funds that may or may not produce decent benefits.

Why Conventional Programs Are an Issue

People usually have a three-part plan: they have a 401(k) or equivalent from their job, their savings, and whatever they receive in social security. The average amount in a 401(k) is $58,000, which won’t last many people two years. Social security isn’t enough to cover the cost of living. Savings accounts aren’t worth much, as the interest rates are so low.

Simply put, these programs aren’t setting you up for a lot of comfort in the future.

Look at What the Wealthy Are Doing

One of Daniel’s best suggestions is to look towards the people who have the type of success you want to have. If you look to the middle class and emulate what they’re doing with their money, then you’ll stay in the middle class.

Instead, Daniel suggests looking to see what the wealthy are doing. When looking to the wealthy, he discovered that almost everyone with money was involved in some sort of real estate. That led him to get into investing.

Passive Income Is the Way to Go

Daniel has a slightly different opinion on passive income. He doesn’t suggest that people quit their jobs; instead, they should take the money they would be putting away for when they retire and invest it. The goal is to start with a small passive income with investments you can afford. Then keep putting your money back into it until you’re making enough to be financially free. From there, it’s up to you whether you want to quit your job and how you want to spend your money.

…But Passive Income Isn’t Always Passive

Some people will argue that property investment isn’t truly passive income. Active investing does involve some work on your part. You’ll spend time searching for properties, doing value-adds, and overseeing management.

Daniel feels that active investing is a small amount of work for what you get in return. Other types of investments that may feel more passive, such as stocks or REITs, won’t give you the same type of returns. The stock market is challenging, even for experts. REITs will give you some returns, but you’ll always be sharing with others.

If Others Can Do It, You Can, Too

Many people are reluctant to make bold moves, especially when it comes to their money. However, Daniel’s advice is to look around you and see how many people are finding success. If those people can do it, that means it’s possible. They don’t always have a special skill set — they are just determined to make their money work for them.

Find Someone Who’s Been Through It Before

Daniel is emphatic about working with people who are a few steps ahead of you, especially if you’re getting into an area where you’re not familiar. He tries to find someone who’s been through it at least once because he feels like he can learn from their experiences. Ideally, he likes to work with groups who were around during the 2008 crisis and survived.

Stick With What You Know

While many people will try to diversify and keep moving into new fields, Daniel suggests sticking with what you know. If you’ve found something that’s making you money, keep going with it. Become an expert and scale up from there. You stand to make a lot more money than dabbling in a lot of different types of investments.

Brutally Cut Your Spending

Daniel and his family didn’t have a lot of money when they first got started with their investments. They decided that building up a passive income was important to them, so they cut their spending as much as possible. You may have to forego luxuries like a new car or even expensive groceries for a while until you’ve grown your income.

Final Thoughts

Saving for when you retire is important, but it’s important that you’re making wise decisions with how you save. Conventional programs will only give you so much. If you’re aiming for comfort and true financial freedom when you retire, you should invest in properties and build up a passive income that will see you far into your senior years.

 

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How to Make Financial Freedom Your Reality in Just 10 Years

How to Make Financial Freedom Your Reality in Just 10 Years

There comes a time in our lives (or maybe a couple of these moments) when we pick up our heads, look around and realize that we aren’t where we thought we’d be by this point in time. Maybe it’s just before a milestone birthday or when one of your kids hits a milestone of theirs.

Maybe it’s at a rock-bottom moment where you’ve been passed over (again) for a promotion, your relationship is waning, and you feel like you’re always working. You ask yourself how on earth you got to this point and attempt to trace back your steps from years ago.

Sometimes we can’t quite pinpoint where it went wrong or what went wrong, but the glaring truth is that things don’t look the way we imagined when we were young, naive dreamers.

 

Why Are You Stuck?

Maybe you followed all the rules, got the degree and the corporate job, saved diligently into your 401(k), budgeted, and even snagged a couple of rental properties. Unfortunately, you’re still feeling held back, hampered by an invisible ceiling. In complete opposition to your grand vision in your twenties, you still managed to become a cog in the wheel, get stuck spending time to earn money, and the life you dreamt of seems a little out of reach.

What’s worse is, looking into the future, you can’t see how this path could ever change. Maybe a property appreciates, and you sell it; perhaps the stock market spikes, and your retirement savings get a boost, but then what? How is it protected? How can you depend on appreciation and Wall Street spikes?

You can’t. So, you start trying to crack the invisible code. You know there’s a way that the ultra-wealthy do things that must work, so you begin exploring how to get there.

Ryan D. Lee felt this same way. That was his story before he founded Atlas Wealth and Cashflow Tactics. You see, as Ryan says, most financial advice is archaic, and 97% of it is dangerous, misleading, or flat out wrong.  However, it’s what most of us are taught, and what so many of the financial gurus out there are peddling, thus what the majority of the world believes.

 

Your Most Valuable Asset, Revealed

It took Ryan a few years of suffering through a high-travel career, a diminishing connection with his wife and family because he was gone so much for work, and the 2008 stock market crash for him to step back and start to question the path he was taught to follow. Does any of this sound familiar or parallel to your experience?

The number-one thing you can realize is that YOU are your greatest asset. Now, that doesn’t mean you should silo yourself and struggle harder, longer, alone. That means you can and should harness the power of knowledge, connection, and innovation when it comes to your wealth strategy.

To get out of a rut — any rut — you’ve got to surround yourself with others who are inspiring, more intelligent than you, maybe a couple of steps ahead of you, and who share (or are already on their way to achieving) your same goals or desires. If you want to lose weight, surround yourself with really fit friends, a nutritionist, a health coach, yoga instructors, runners, and the like. Lifestyles and habits are contagious, and Ryan knew that, so he surrounded himself with people who craved financial freedom.

He began to examine how other successful, wealthy people lived and noticed that they have a team on which they rely. He immediately immersed himself into a mastermind/book club where the group read Rich Dad Poor Dad, The Creature from Jekyll Island, and Becoming Your Own Banker, and would discuss how they could implement these books’ principles into their lives.

 

Leveraging Life Insurance Differently Than “Everyone Else”

Once you cross into that alternate mindset of educating yourself and leveraging your relationships, you become unstoppable by the standard money myth-conceptions (Ryan’s words). Ryan and his now co-founder started to reverse engineer the banking system, explore new interest and appreciation-earning opportunities, and evaluate how they could increase their control while decreasing their tax liability.

Together, they learned a little-known way high cash value life insurance policies are used to create your own banking system. At first, the idea of using a life insurance policy while you’re still alive seemed ludicrous, especially as a part of a wealth-building plan, but the concept goes so much further than that. When a high cash value life insurance policy is set up and used properly, you can earn interest inside the account while also using the cash to propel your real estate investment strategy.

This is where the knowledge-gathering piece collides with the networking piece. First, you learn about the tools and how funding a high cash value life insurance policy can efficiently fund your real estate investments.

Next, leveraging your network of property management professionals, brokers, financing, insurance professionals, and other key relationships creates accessibility to the components needed for your accelerated wealth-building strategy.

 

Connecting the Dots

Maybe you’ve done the math and it’s already clear to you that $300K in your retirement account earning an average of 8% or even 10% or 12% per year just isn’t going to cut it. So, there are two options, right?

  1. Invest more principle.
  2. Earn more interest.

Wrong. This is the archaic way — the old way. This way is assuming your money can either be spent or saved, not both and definitely not at the same time. So, take a step back with me once more.

You already know real estate syndications are a great way to invest, earn great returns, reduce your tax liability, and protect yourself and your money from the volatility of Wall Street. Right?

So, combine that knowledge about real estate syndications with this fresh perspective on life insurance policies. An investment strategy that combines high cash value life insurance with real estate syndications opens up a new world of possibilities because it allows your money to work for you in two places simultaneously.

When you fully fund a high cash value life insurance policy, borrow against the policy, and use that to fund your real estate syndication investments, you’re successfully making your money work for you in two different places.

How?

The cash value policy continues to grow while your cash flow from the real estate syndication deal begins to trickle in. Suddenly you’re earning interest inside the life insurance policy AND getting checks in the mail. Mind. Blown.

 

Final Thoughts

You’re already on the right path because you’re here, reading this. But know this with all truth and conviction: Your success with investing well and achieving financial freedom depends on your ability to increase control over your cash, increase the appreciation and returns you’re receiving on your investments, decrease the risk you face (overall and per deal), and decrease your tax exposure.

Like you, Ryan craved time freedom. He wanted to be home with his family while also being confident that he could provide financially now and in the future. So, he became obsessed with implementing a set of core principles within his personal financial plan to achieve that goal as fast as possible. He now teaches others about the Core 4 and how to use them to create velocity with their money.

We’ve found that investing in real estate syndications with cash borrowed against our fully-funded high cash value life insurance policies is one of the best, most lucrative ways to make sure our money is working as hard as possible for us and not the other way around.

 

About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/ 

 

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6 Tips to Succeed in Uncertain Times

6 Tips to Succeed in Uncertain Times

These have been uncertain times over the past year-plus, and they have made the act of investing in apartment properties much more unpredictable than before. Although there will always be demand for homes, the value of properties such as these will tend to fluctuate even more during uncertain times.

One of the best things that an active investor can do upon investing in single-family apartments and engaging in multifamily investing is taking a close look at what the competition is doing.

For example, consider all of the ways that you can simplify the renting process for the prospective renter. If you can place the entire process online, from providing basic information about your rentals to the signing of a lease, that would be preferred. However, if that is not possible, whether permanently or temporarily, make as much of it as easy to research and complete as possible.

 

Visuals

Having photographs of the property both inside and out is a must-have. Probably around 25 would be the best balance of not too few and not too many.

In addition, consider offering virtual walkthroughs to allow your virtual visitor to experience their prospective new home more fully without needing to leave their screen. This allows them to either be sold on it on the spot or be intrigued enough to want to learn more or see it in person. This can be done through one or more videos or through a more immersive walkthrough experience.

Of course, these online visuals have become especially important over the past year-plus as so many have felt that it is not in their best interest to actually come on-site unless they must. A lack of a virtual walkthrough or a poorly put-together one can turn off prospective renters, particularly if your competition is offering this feature.

Regardless of what visuals you are providing, keep in mind that prospective renters will also want some visuals of what the neighborhood is like and what is nearby. Is it near a park? What is the view like from its windows? As is commonly known among those involved in apartment investing, location is one of the most important features that renters consider.

You may also want to consider uploading a drone-flyover video.

 

Thorough Listings

Another step that you should take as an active investor in these types of properties is being thorough in the text of the listings for each place you own. Well-written, engaging text that both educates and draws in the visitor is preferred. At a minimum, you want some prose there. Not only is this essential to draw the reader in, but it is also important for SEO-related reasons.

Regardless, make sure to include all of the necessary specifics within the listing, such as its price, location, number of bedrooms, type of flooring, if it includes a balcony, if pets are allowed, how much a security deposit would be, and if utility costs would be included in the rent or paid for separately.

This limits the need for potential renters to contact you with questions, saving time for yourself and your staff. It also removes what could be a mental stumbling block that may cause them to move on and consider different properties to rent.

 

Applying, Being Screened, and Completing a Lease

Active investing at a high level also means that you should make the application, screening, and lease completion process as simple as possible. Group those steps together as part of a procedure on your website or, in lieu of that, otherwise simplify them as much as possible.

One of the benefits of investing in a significant number of apartment properties is that you can have one application take care of the application process for all of them. The same goes for screening; the more places that a prospective renter can be simultaneously screened for, the more apt they will be to ultimately decide to rent one that they have been approved for.

The lease-signing step of the process might be the most difficult one to incorporate into your website, and this may require the prospective renter to instead make a trip to your property, but do consider doing this if you can.

 

Metrics

As you progress in this active investing opportunity, it is important to keep abreast of your metrics. For example, keep up to date on how many of your visits turn into applications and, of those, rental agreements. See how those figures vary from apartment type to apartment type and see how tweaking certain aspects of your listings affect these things.

 

Apartments.com

One of the best examples that you should consider mimicking as an active investor is Apartments.com. See what about its design impresses you when you put yourself in the shoes of a prospective renter. Of course, you could also simply use their services for listing your rentals if that ends up making the most sense financially and otherwise from your end.

 

Non-Apartment Properties

Of course, many of these recommendations can be applied to commercial investing and commercial properties as well. Whether you are taking advantage of a multifamily investing opportunity or a commercial investment opportunity, you want to ensure that your properties are being shown in the most positive, informative light possible and that those who want to take advantage of any commercial properties that you own may do so with ease, from the inquiring stage to agreeing on a rental.

 

 

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5 Best Tips for Investor Relations

Over the years, I have had the privilege of serving in investor relations with a number of firms. Starting out, I worked for a brokerage firm that had trillions of dollars in assets under management. I later made a 180-degree turn to a startup real estate syndication firm where I built an investor relations platform and served as Director of Investor Solutions. Currently, I serve as Director of Investor Relations at Ashcroft Capital, a group I have grown with and have been investing with for years.

I have never written a blog or article on the topic of investor relations. My primary focus has been on helping others learn how to invest and create wealth for themselves. Today, I felt compelled to share five tips for investor relations that can help you. Whether you are involved in investor relations yourself, or if you’re hiring for an investor relations role, or even if you’re simply an investor looking to partner with a firm, these five tips will help you create better conversations and awareness. Let’s get right to the point:

 

1. Discuss the Good AND the Bad.

Everyone loves to talk about the positives, best-case scenarios, and strong past performance. The truth is, it can create skepticism among some investors if you fail to mention the risks or the downside scenarios as well. You create more trust and transparency if you do not gloss over the negatives, but instead, proactively put them out in the open.

 

2. Be Visible.

It may not be a great idea to start raising capital or promoting your deals without a network, community, or online presence. Make sure to create content on social media outlets, be a guest on podcasts or host your own, and build a thought leadership platform.

Some firms and/or general partners have thousands of followers on one outlet and post there frequently (on Facebook, for example) but they are missing thousands of potential investors who prefer using LinkedIn or YouTube instead. It is better to post a small amount of content on multiple social media outlets than to go heavy on one outlet. The key is to be visible in as many places as possible when someone Googles your name or firm.

 

3. Professionalism.

Newer syndication groups have reached out over the years and asked me to take a look at their website, slide deck, or deal overview from the perspective of a Limited Partner investor. I always circle back to professionalism. For anything you post or distribute, it is critical to remove typos, glitches, or anything that might suggest your team is unprofessional or simply doesn’t care.

Also, what you say and how you say it is really important, so be aware of your messaging. When I join investor Zoom calls or podcasts (for example) I always wear a clean pressed button-up shirt and/or a sports jacket. It may seem unnecessary while working from home, but impressions go a long way. Always be professional.

 

4. Know Your Target Audience.

Funny story… I gave a speech years ago when I was first trying to network with more accredited investors. I had an investor/realtor friend of mine in Orlando who was wanting to start a local meetup for real estate investors. I decided I would partner with him on one of the first meetups.

I marketed the event, created a PowerPoint, rehearsed my speech, got all dressed up, traveled to the event, and gave it everything I had. When I finished the presentation, the audience applauded, and I remember thinking, “I killed it!” Only one problem: It turned out that nobody in the audience was an accredited investor. Lesson = Know who your target audience is, where they hang out, what they do, and get out in front of the right crowd to avoid wasting time and energy.

 

5. Respond Quickly.

Oftentimes it is not about whether YOU are ready to pitch your deal, it is when YOUR CUSTOMER is ready to invest. If one of your investors decides out of the blue that they are ready to deploy $100K today, and they email, text, or call, you better be ready to help them out ASAP. You can lose an investment simply by not responding quickly enough.

On a personal note, a couple of months ago I was looking to make an investment with an operator. I emailed three quick and easy questions after reading their project overview and never heard back. I placed that capital with another operator a couple of weeks later. We work in a very competitive space — something to keep in mind. Responding is also a form of professionalism.

 

In conclusion, I will leave you with a bonus tip…

 

Be Adaptable.

Things change rapidly in today’s world. New conferences, new social media outlets, COVID — you must be adaptable and open to experimenting to see what works. When one door closes, pivot and look for another. If one strategy stops working, be adaptable. One of my mentors told me years ago: “Double down on what works.”

 

 

To Your Success,

Travis Watts

 

 

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Next Steps for Mindful Millionaires in the Making

Next Steps for Mindful Millionaires in the Making

Maybe you’ve heard this before?

True self-value comes from the inside, and no amount of money or any level of success will change that.

We’ve all seen the stories about the rich folks who are sour and mean and the poor folks who are happy and kind to others. Some say that wealth makes you more of who you already are inside — that it emphasizes your true colors.

Hopefully, this concept of inner versus outer wealth arrives front and center in your focus when you hit a rough patch — like when you feel you’ve hit a plateau, or as if you’ve been making all the right money moves but don’t feel like it’s paying off.

While we’d all rather avoid that deep, inner work and self-evaluation (because it’s painful and emotional), sometimes you just can’t get to the next level in life until you spend some time exploring your own self-value.

 

Look in the Mirror and Read Between the Lines

Struggle and stuck-ness can occur at any level and multiple times throughout life, especially throughout your investing and wealth-building journey. At these moments, you’re forced to look inward and attempt to understand the ways you believe your value is conditionally based on external circumstances.

It’s exceptionally usual to carry beliefs that are not serving you well without realizing it. Here are a few examples:

  • When I earn/have/save X amount, I’ll be happier.
  • You’ve got to work hard for money.
  • More money = more problems.

You might laugh at some of these because you’ve heard them before, or on the surface, they might sound silly. They may be phrases you grew up with, hear all the time, or have even said before!

Still, when you stop to examine the noise, your negative self-talk, and behaviors that result in self-sabotage, you’ll notice that these and other narratives will surface. It’s these types of back-handed narratives that hold us back, and only when we realize their impact and consciously make a choice to dismantle these beliefs can we elevate beyond where we are now.

 

Discovering Your Roadblocks

Leisa Peterson*, the author of The Mindful Millionaire, says that people lose out on money, time, and opportunities every day because of their inability to shift their inner narrative toward acknowledging the limitless, non-negotiable truth they already are.

She helps people embody confidence and achieve economic security and self-love by helping them heal their hearts and become aware of the roadblocks on the path toward their prosperous relationship with themselves.

The trouble is, traditional financial services assume you have a healthy relationship with yourself and your money, but most people don’t. Most people believe money reflects self-value, which results in a clouded approach toward financial decisions.

*Listen to an entire interview with Leisa in Episode 6 of the Investing For Good podcast: How To Become A Mindful Millionaire.

 

Bringing Mindful Millionaires to the Surface

Leisa shares eight steps designed to help you break the invisible barriers in your life, and they follow the acronym IPROSPER. Mindfully develop your inner awareness to better support the exterior aspects of growing your wealth by spending time in each of the following steps:

Intention

Look inward and ask why you’re here, what you want to do, and where you want to focus. Decide what catalyst brought you to this point and center your awareness on who you really are deep inside.

Patterns

Recognize patterns in your personal behavior, your feelings around security, success, and failure, and notice areas in which you avoid taking action. There are patterns you mindlessly repeat that do not benefit you; this is the time to bring those into awareness.

Reclaim

Realize your lack of focus or fear of making a difference might have you scattered and overextended. Reclaim your feelings of orientation with a renewed sense of awareness and hyper-focus on the steps toward what your true self desires.

Opportunity

Explore your deepest wants toward authority, abundance, peace, lifestyle, connection with others, self-discipline, and influence. What is holding you back from pursuing the opportunity for multifaceted growth in these areas?

Story

Understand the stories you’ve carried under the surface that have not been helping you toward your goals but instead have been holding you back. This might look like fear of rejection, having low expectations, or resisting money-making opportunities.

Permission

Give yourself permission to attract more, create more, and achieve more. Trust that you can move into the next chapter with openness. The possibility is there — you just have to accept it, even if it looks different than you might expect.

Evidence

Find supporting evidence that you are enough to achieve the life you want to live. Recognize that your inner struggle has been causing fragmentation of your focus and leading to an invisible resistance of wealth.

Reinvention

Claim what you want, set your goals, and relentlessly pursue them, realizing that failure is part of the process. Reinvent your journey as many times as it takes to achieve a life you love.

 

Minding Your Money

When you’re able to see how money can help you achieve your goals instead of believing money is THE goal, it is more likely to flow in and out of your life in a way that moves you toward inner and outer wealth.

When you feel like a million bucks, you can achieve anything, but if you have a low level of belief in your abilities or a low sense of self-worth, it will always seem like something is working against you. I know you’ve felt this firsthand before. We all have.

Try heading out for a run feeling like you’re on top of the world. Contrast that with a run after a day when everything you touched seemed to fizzle. Which run do you think went further, faster, more effortlessly, and was more fun?

As you progress through this journey, you’ll naturally gravitate toward a community that is not only wealthier monetarily, but also wealthier mentally. Surround yourself with people who inspire you, are attuned to their inner selves, and maintain a strong sense of self-worth and limitless value.

 

Keep this in mind: Money is only one of the bricks in the marvelous structure of fulfillment and abundance.

 

About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/ 

 

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Best Ever Advice from 11 Military Members on Memorial Day 2021

In honor of Memorial Day, we wanted to highlight military members interviewed on the podcast over the previous 12 months. Below is the Best Ever advice from 11 current and veteran military members:

 

JF2102: From Military to Millionaire with David Pere

“My best advice is get out there and take risks, but just make sure that whatever risk you take won’t break you. It doesn’t matter how many times you fail as long as you’re able to recover from that risk. And as long as you’re not going to get broken by whatever risks you’re taking, the pay-off will always end up being bigger in the long run.”

Click here to listen to David’s full episode.

 

JF2107: Brothers Working Together with Chris & Ashton Levarek

Ashton: “No one is smarter than all of us, so I really think my best ever advice is to really get out and network with the people that are down in the business you want to get into and learn as much from them, and then bring them in on your team. Try to build up that team of people you’re going to work with.”

Chris: “I think you’re only as strong as the people that you’re surrounded with. They’ll not only elevate you, but they’ll support you in your weaknesses. If you come into an area that you’re weak, or you hit a roadblock, it’s fine to get through that roadblock and that challenge, but how do you correct it in the future? You’ve got to create some kind of process or system that then in the future will either simplify that challenge or make sure that doesn’t occur at all. Then you’ll be able to get through to whatever goal you’re trying to achieve without hitting those same roadblocks every time.”

Click here to listen to Chris’s and Ashton’s full episode.

 

JF2155: Sales Skills to Improve Your Business with Bill Kurzeja

“We have two ears and one mouth; use them accordingly. What I have experienced and witnessed throughout my career is that they’re telling you exactly how to win them over. You just have to listen, and you have to hear, and then use that information and apply it back. So, if there was one thing that all of us could do better at, that’s listening.”

Click here to listen to Bill’s full episode.

 

JF2204: Investing While Overseas with Vincent Gethings

“Set goals based off of your potential and not your abilities. A lot of people have these limiting beliefs. They set goals off of what they think they can accomplish right now based off of their current experience, their current education levels, their current partnerships, or whatever they have. So, they set their goals extremely low. They use that SMART acronym, which I absolutely hate because the R in smart is realistic. I absolutely hate that, because you sell yourself so short.”

“So, I think the biggest thing is people sell themselves short because they want to set realistic goals for themselves. They do it based off of their ability and not their potential. So, a big example of that is the 10X rule. I read that and I was like, ‘Well, 20. Well, scratch that off and write 200,’ and that’s what was my goal, and I quickly went from 0 to 120 in a very short amount of time once I did that. So, absolutely set big, hairy, audacious goals, and then take massive action toward them. Don’t be realistic, because it doesn’t give you any room to grow.”

Click here to listen to Vincent’s full episode.

 

JF2208: Veteran to Founder with Seth Wilson

“Think big, but act small. So, think big on what they’re going to do, but make sure that you’re paying attention to the details.”

Click here to listen to Seth’s full episode.

 

JF2224: Note Investing Strategies with Jamie Bateman

“Focus on your strengths and think about how you can add value contributing to something bigger than yourself. Also, just do what you say you’re going to do. There are a lot of people that just don’t follow through and I think your word is really important.”

Click here to listen to Jamie’s full episode.

 

JF2264: Investor Agent with John Chin

“One investor client will change the trajectory of your future because of what they teach you, the access to resources, and how they shorten your learning curve. So, if you’re working with investors, you make friends, and one or two of those friends are going to become your mentor. So, just start working with investor clients. Don’t worry, everything else will take care of itself.”

Click here to listen to John’s full episode.

 

JF2299: Out-of-State Turnkey Properties with Axel Meierhoefer

“Look for the best-balanced deal. The best balance between people saying 1%, and what the property is really worth. The best balance for how much money you want to get in… But fundamentally, the best balance means you want to start now; don’t wait or let people tell you that you have to wait for a long time. Take the best balance that fits for you and start now.”

Click here to listen to Axel’s full episode.

 

JF2342: Military Couple Powers Through Real Estate with Lindsey Meringer & Amanda Schneider

Lindsey: “The people around you, both mentorship and community. And there’s that rule, the sum of five. We’ve surrounded ourselves with like-minded investors; there’s a couple of buddies that I have in special forces that are investors, and we do meetups and everything. And we’re just so driven every day by their social media posts, their text messages, everything. If we got down on ourselves a little bit or a little frustrated, we just look at our community around us and are immediately reinvigorated to go.”

Amanda: “Don’t be afraid of doing your first deal or doing additional deals, even if you don’t have money, because you can make it work. And that’s one thing that just this last year has taught us. We’ve found, we’ve also been able to borrow some money from our IRA creatively, and we’ve just found ways to make it work. If you find a deal and it’s amazing, you’ll find a way to make it work.”

Click here to listen to Lindsey’s and Amanda’s full episode.

 

JF2355: The Benefits of Hosting Real Estate Meetups with Megan Greathouse

“Use time to your advantage. The amount of time that you have to build with real estate is always helpful. So, for instance, a property that I bought four years ago, just by naturally taking care of it and increasing rents as tenants turned over is now worth almost 50% more than it was when I bought it, thanks to buying in kind of an up-and-coming area, taking care of it, and increasing rents. So, all of a sudden, even though cash flows were maybe early on $100 per door per month, and then $200 and then $300 — the cash flow has grown, but my value has also grown and I’m able to refinance and take cash back out and put that into other rentals. And it’s just amazing, the snowball effect that you have over time with real estate. It’s not ‘get rich quick,’ but it’s quicker than just throwing money in a savings account forever. And there’s a lot of power behind it. You make money in a lot of different ways. So, time is actually very helpful in real estate.”

Click here to listen to Megan’s full episode.

 

JF2362: Cherry-Picking the Deals with Gary Spencer-Smith

“Take steps and do it. Don’t sit and wait. Get some knowledge, which is free. You’ve got awesome podcasts that you can listen to. You don’t have to pay tens of thousands of dollars for the knowledge. Get the knowledge that you can for free, pay a little bit of money to get some more refined knowledge, and then go take action. That’s it. Action will teach you more than any mentor or coach.”

“The second tip would be to find a good mentor. You don’t have to pay for that. That would be someone that’s done it, successful, who is willing to let you take them for dinner, take them for a coffee, bounce some ideas. If you can get a good mentor, you’re going to jump leaps and bounds ahead of everything else, and listen to what they say.”

Click here to listen to Gary’s full episode.

 

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Forging an Entrepreneurial Mindset

Succeeding in business is about a lot more than simply coming up with a good idea and putting it into action. To really succeed, an entrepreneur must develop the attitudes and mental habits that will allow their business to flourish. Whether you’re getting started in commercial real estate investing or scaling your existing company, you need to work on yourself to create a winning mindset.

 

The Importance of Developing the Right Mindset

From raising money to building a team, there are many aspects of running a commercial real estate business that require mental fortitude. You simply can’t win in today’s competitive market without embodying the attitudes that are conducive to success. A closed-minded or arrogant entrepreneur will always lose out to a humble and open-minded competitor.

 

How to Build an Entrepreneurial Mindset

A positive mindset isn’t something you should expect to have innately. It’s not that some entrepreneurs are blessed with the right attitudes while others are doomed to failure. You can proactively cultivate a better mindset by learning about the types of attitudes that prove beneficial.

By examining your own mental habits and seeking to improve them, you can become better at management, investor relations, or any other area of business. Here are five possible areas for improvement.

 

Don’t See Transactions as Inherently Confrontational

Whether you’re trying to buy or sell a commercial real estate deal, you need to keep in mind that business transactions are not, by definition, confrontational. Remembering that the other party is not your adversary will help you build trust. It will also remove any sense of anxiety you might otherwise feel.

If you approach every interaction as a confrontation, you’ll create tension where it doesn’t need to exist. Some salespeople imagine that they’re on one side while the potential buyer is on the other. This makes them think they have to trick or beat the other person in order to come out on top.

Alternatively, a salesperson could recognize that they’re simply helping another human being solve a problem. Instead of being on different teams in direct competition, they imagine themselves and the buyers as teammates working together towards a common goal. You can apply this same mindset to all negotiations and discussions involving your business.

 

Strive for Outcome Independence

It’s important to remember that most business ventures have a probability of success rather than a certainty of a positive outcome. Your job as an entrepreneur is to determine whether a particular initiative is likely to work. From there, whether the move actually pays off won’t have an effect on the soundness of your decision. You made your choice according to the potential risk/reward ratio, not because you knew the endeavor would prove successful.

This attitude can be termed outcome independence. A smart entrepreneur should realize that the outcome of a move doesn’t have to define the move itself. Even if a commercial real estate deal or negotiation ends in failure, you can learn from the episode without considering it a mistake.

Take, for example, a commercial real estate investor cold calling property owners. This is an attempt with zero risk and a very high reward. The worst thing the people could do is say “no,” or one of the owners could be willing to sell their property. Even if the investor gets nothing but negative responses over the course of an afternoon, they shouldn’t view the effort as a failure. This represents an outcome-independent mindset.

 

Always Learn From Your Mistakes

Whenever a business project fails, you owe it to yourself to learn from the experience. This is what allows you to grow as an entrepreneur and a person. Any failure left unexamined is an opportunity that goes wasted.

The potential lessons within a project are a major part of the project’s value. Whatever the result of the endeavor, you’ll still have a chance to learn from the experience. One way to think of this dynamic is in terms of 50/50 goals. With every goal you set, only 50% of the success is based on whether or not you actually achieved what you were hoping for. The other 50% comes from the ability to draw some lessons from the experience.

Consider the example of a failed negotiation. Even if you didn’t finalize the deal you were expecting, the endeavor will still be 50% successful if you come out of it smarter and stronger. Not only will developing this mindset make you better at self-improvement, but it will also help you stay motivated. With 50/50 goals, total failure is practically impossible.

 

Fail as Early and Quickly as Possible

Failure is inevitable in business. Some ideas aren’t as good as you thought they were, and some ventures simply don’t work out. While you shouldn’t let failure get you down, you should do everything you can to mitigate the damage. One way to do that is by making your failures as short-lived as possible.

Imagine, for example, that you are running a company that has just launched a new product. As demand exceeds expectations, you press your supplier for more units, unsure of whether they will be able to keep up. If you stick with the supplier even as they barely manage to fulfill your orders, you’re setting yourself for eventual failure when demand finally outstrips the suppliers’ capacities. Instead of delaying the inevitable, consider asking the supplier to provide a massive amount of units right away. When they say they can’t fulfill the order, you’ll have identified the point of failure early enough to change course.

Drawing failure out will only compound the damage. Learning from failure is important, but that doesn’t mean you want your failures to become year-long courses. Learn the lessons as quickly as possible, then abandon the failure before the costs rack up.

 

Don’t Try To Master Everything

While all entrepreneurs would like to be amazing at everything and micromanage every aspect of their companies, such an ambition simply isn’t feasible. The best managers know how to delegate tasks in order to maximize efficiency at every level of a company.

If there are certain tasks that you’re simply not very good at, don’t hesitate to hire someone else to do the job. There’s a reason that division of labor is a fundamental component of contemporary society. Nobody’s perfect at everything, and only vanity would keep you from making use of others’ expertise.

It can also be worth it to outsource tasks that you’re actually quite good at in the interest of freeing up your time. As a manager, you should be focused on strategy and upper-level operations. You are the company’s architect, which means pounding nails and sawing wood isn’t the best use of your time no matter how great a carpenter you may be. If you can outsource a daily task to someone who can do 70% as good of a job as you, it is still worth it. You’ll make up for the loss in efficiency by giving yourself time to work on bigger ideas.

 

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Ending Financial Illiteracy: How To Teach Your Kids About Money

We’ve all been there – sighing deeply as we turn off the lights and (again) reminding the kids to be mindful about wasting electricity. I, too, have been known to criticize my family members about turning off lights, using less water, and bundling errands. Sure, we’re eco-conscious, but even more so, we’re financially conscious and determined to pass positive financial habits on to our kids.

I know I’m not alone as my kids seem to incessantly ask, “Can I have this?” with every turn of the shopping cart. As parents, it’s easy to feel like the kids have no respect for how hard we work and the money it takes to provide them this extraordinary life.

But before we assume they’re ungrateful, let’s take a step back and look at the truth.

Open conversations about money, why we spend what we spend, and the reasons we make certain financial choices over others are rare, especially from parent to child.

Most parents don’t know where to start when it comes to teaching their kids about money. It’s a big, wide-ranging topic that might even come with some baggage, so it’s easy to feel frustrated, misunderstood, and even overwhelmed when it comes to talking to your kids about money.

Here’s why – it’s not a one-and-done conversation. Teaching financial literacy to your kids is an ongoing 18+ year commitment, parallel with the job you have to raise respectful, strong-willed, purposeful humans. Just as you would teach table manners to a toddler and then continue to remind them about your expectations well into their teen years, you’ll begin with simple math concepts around the age of 5 and expand into investing and compound interest during the teen years.

The struggle you’re facing right now with the light switches always being left on is because they haven’t mentally connected the electricity being used with the cost of that use. In this article, you’ll discover how to talk with your kids about money, a few simple concepts you can teach your kids this week, and tangible lessons you can implement as part of your plan toward your kids having a financially savvy future.

 

How Your Young Kids Will Begin To Grasp Financial Concepts

Of course, you’re not going to begin your first conversation teaching compounding interest to your 4-year-old! Children can understand a little more with each year, and you slowly build on their math skills and present simplified financial concepts based on their age, the situation, and the lesson you’re shooting for.

Young kids between the ages of 5 and 9 just need to learn basic arithmetic and have practice earning money, saving some, and spending some. This teaches them the basics of how the world works – you earn $10, you save $2, and you can buy a new toy for $8. Simple, right?

When kids can connect that each thing we do or have is paid for somehow, they’ll start to be more considerate of your household budget. Leaving the lights on, for example, might make the electric bill higher, and you have the opportunity to present and share the statement from the electric company and discuss this financial obligation that exists month in and month out.

Between the ages of 9 and 15, children can understand adult-like financial concepts like credit cards, compound interest, investing, and compute complex equations. At this point, it’s highly recommended that you share much more about your income, your bills, mistakes you’ve made, and, yes, your investing choices with them.

Teaching concepts to our children while they’re young, while they have time to practice and experiment with money under your wing instead of when it matters (like with rent or their credit), provides them an even greater chance at financial success.

 

Saving Is Great, But Investing Is Key

The most important thing, no matter the tools you use, is that your child gets access and experience with money. That means earning it, making choices whether to spend or save it, losing it, investing with it, borrowing it, paying it back, and everything that we adults do with our money but on a child-size scale.

Provide opportunities for them to earn some cash, and walk them through what to do with those earnings. As you encourage them to save some, spend some, donate some, and invest some, talk to them about why these choices are essential and share about similar decisions you’re making with your own money.

Don’t be afraid to share more significant concepts like the impact they could make on a large scale with donations, mistakes you’ve made and what you learned from them, or how they can double their money investing as you do now in real estate syndications. The real lightbulb moment will be when they begin to understand that investments provide passive income – so much so that, if done well, they can choose whether or not to work.

You get this beautiful opportunity to guide them in earning their first several thousand dollars, building up their savings, and gaining exposure to the fantastic world of investing. Just imagine how much more opportunity for freedom and impact they have just by exposure to these concepts. Amazing!

 

The #1 Money Mistake Parents Make

In general, talking to your kids about money is a million times better than avoiding the subject. It doesn’t matter how much or how little of an expert you think you are on the subject. They need to know about your financial mistakes to learn from them just as much as they need to know about the great decisions you made so they can emulate them.

Either way, discussing finances and allowing your child some exposure and experience with money and financial conversations provide them more knowledge and confidence with money than if it were never discussed at all.

Unfortunately, there is one glaring mistake we’ve probably all made.

Most of us can admit that we’ve said, “We can’t afford that,” at least once to our kids in response to their request for something.

While that may be the easiest, most automatic quip, it’s a missed opportunity for a teachable moment. Sometimes you’re just tired of saying “No,” but it’s important that we lean into that conversation about why we’re not buying it and why/how we’re making different choices with our money.

The truth is, we probably can afford that. So, instead of accidentally frightening your kid into a scarcity complex (yep, that’s what really happens), intentionally replace that phrase with a new, more precise, more truthful expression like, “That’s not why we’re at the store today,” or “That’s not in the budget right now”, or “The money I’m spending today is only for groceries.”

It’s okay to tell your kiddo the truth about why your answer to their request is no, and it’s even more okay to have an in-depth discussion about budgeting, spending money on meaningful purchases, and investing for the future instead of instant gratification. Honestly, we adults struggle with these concepts too, so it’s a great idea to introduce them at a young age.

If you replace the thoughtless ‘we can’t afford that’ response with an open conversation about financial choices, you and your kids will be much better off.

 

How To Talk To Your Children About Money

The best thing you can do toward teaching financial literacy to your children is to model your own financial choices openly for them. Talk them through the options you have, why you’re making one decision over another, what bills you’re paying and why, and even the trade-off we all face in spending money versus saving it versus investing it.

They need a taste of reality while still living at home to learn about decisions they will have to make when they are out on their own. Allow them to exercise their own spending habits and make the $20 or even $100 mistakes now because those are much better to learn from than the $1000+ mistakes they could make with rent money when they’re older.

Share about your income and bills so they can see what it costs to live their current lifestyle. At the same time, share openly about what it was like for you when you first started out. Although it might be hard to talk about your mattress-on-the-floor and ramen noodle days, they need to know that your life wasn’t always cashflow positive.

This openness can help them realize that it’s okay to start out small and that, realistically, they won’t be living their current lifestyle when they move out. While that might be scary to some, you must help them see the value of that independence. With your help, they’ll begin their independent financial life with accurate expectations and knowledge of what utilities, transportation, food, and other necessities cost, and they’ll be less likely to feel like a failure in comparison to the lifestyle you’re able to provide.

 

Ending Financial Illiteracy For The Next Generation

Create open lines of communication between you and your kids about money and financial subjects so that they can always come to you with questions, dilemmas, wins, and losses, and so that you’ll continuously have the chance to guide and teach even as they grow into early adulthood.

While we remember what it’s like to struggle vividly, our kids only see what life is like today. With full bellies, all the toys they can handle, a plush bed, and a sweet vacation each year, they don’t necessarily understand the value of a dollar or the sweat and tears it took to reach this level of financial freedom.

This is why it’s even more critical to talk openly with your kids about spending, saving, and investing and that you instill positive financial values while they’re young. You want them to be equipped with the tools to care for themselves, build their wealth, responsibly use the wealth you pass to them, and positively impact the world when it’s their time.

We’re always learning, right?  So, again, it’s a great idea to model that for and discuss your journey with your kids. You don’t need picture-perfect finances to be an authority on the subject with your children. They’ve already looked to you for every answer they ever needed their whole lives, and they aren’t stopping now.

Teach them the power of investing and help them get the correct accounts set up so they can practice and begin getting financial experience. Just imagine how different your trajectory would have been if you’d known about compound interest, passive income, and real estate syndication investments when you were their age!

Most of us didn’t get much of a financial literacy lesson from our parents, if at all. Fortunately, most of us are also absolutely determined to teach our children about money and break the cycle of financial illiteracy, struggle, and living paycheck-to-paycheck. With the simple tips and encouragement in this article, now we all have an opportunity to positively impact the next generation by teaching financial literacy to our kids!

 

About the Author:

Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments – an award-winning real estate private equity firm – and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/ 

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What Financial Reports to Send to Passive Apartment Investors

After closing on an apartment syndication deal, one of the responsibilities of the general partners (GP) is to provide the limited partners with ongoing updates on the investment.

Here is a blog post where we outline all the GP’s duties after acquisition.

One aspect of this passive investor communication is providing financial reports on the asset. Not all general partners provide financials to limited partners. However, when they do, there is an increase in trust between the GPs and LPs, which is the number one reason why passive investors chose to invest with one operator over another.

The purpose of this blog post is to outline the process of providing your investors with deal updates by sending them financial reports.

What Financial Reports to Send to Passive Investors

The reason to send passive investors financial reports, aside from increasing transparency and trust, is so that they know what is going on with the investment. The information provided in monthly or quarterly recap emails is a good start, but a spreadsheet with hundreds of data points paints a more detailed picture of the asset’s operations.

Ultimately, how often you send financial reports and the types of financial reports you send is up to you and the preferences of your investors.

The two most relevant financial reports to send to passive investors are the rent roll and the T-12.

A rent roll is a document or spreadsheet containing detailed information on each of the units at the apartment community, along with a variety of data tables with summarized income. The rent roll provides passive investors with a current snapshot of the investment’s revenue.

A T-12 is a document or spreadsheet containing detailed information about the revenue and expenses of the apartment community over the last 12 months. Also referred to as a trailing 12-month profit and loss statement, the T-12 provides passive investors with current and historical revenue and expenses.

A best practice is to send financials at least once a quarter.

How to Obtain Financial Reports

The first step in the process starts before you even have a deal. Most likely, the financial reports will be generated by your property management company. When interviewing property management companies, make sure you set expectations. First, ask them what type of property management software they use and if it can generate custom financial reports. Ideally, they provide you with a sample rent roll and T-12. If they do, how detailed are the reports? Is the T-12 broken down into specific line items? Does the rent roll list out all of the important metrics?

Here are examples of how detailed a rent roll and T-12 should be.

Assuming they generate the right reports, the next question to ask is “will you send me financial reports upon request” and “what is the lead time?” In doing so, you will know if they are willing to send you financial reports and how quickly (or slowly) you can expect to receive them.

How to Send Financial Reports to Passive Investors

One approach is to include links to download the financials in the monthly or quarterly recap emails.

Create a Dropbox folder for each of your properties. Each quarter, upload PDF versions of the rent roll and T-12 to the property’s respective Dropbox folder and include the links in the recap email. For example, include a sentence like, “Also, you can download the quarterly financials (current rent roll and profit and loss statement) by clicking here,” and the wording “clicking here” is hyperlinked to the financial reports.

Another more advanced and efficient option is to upload the financials to an investor portal. Rather than linking to the financials in your recap emails, you can direct the passive investors to the portal.

Before sending the financial reports, make sure that your resident’s and investor’s personal information is removed. Sometimes, the investor distributions will be included at the bottom of the T-12. Only include the line items above the net operating income. Also, make sure you remove the variance column from the T-12. Your property management company’s software may include a column that has the difference between the actuals and the project (i.e., the variance). To avoid confusion, remove the variance column and only send to investors upon request. Consider removing the names of residents for the rent roll too.

How to Handle Passive Investors’ Questions About Financials

Like any questions received from investors, if you know the answer, reply in a timely fashion. If you don’t know the answer, reach out to your property management company.

The most common question you will receive from investors will be about how the T-12 actuals compare to the projections you provided in the PPM. If you are not hitting your projections, speak with your property management company to determine why there is a variance and what is being done to solve the issue. The best responses to investor’s questions include a diagnosis of the issue as well as the solution which should already be implemented.

 

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Attacking Old Goals with New Methods” Featuring Matt Faircloth

When it comes to real estate investing, Matt Faircloth is definitely someone to listen to. He’s a full-time investor, and he has many successful flips and closings to his credit.
These days, Matt and his team specialize in commercial real estate investing, especially office complexes and apartments. And his company focuses solely on real estate in Kentucky and North Carolina.
Recently, Matt came across a potential deal for an apartment building in Winston-Salem, an outstanding property with a highly desirable location. However, its 336 units made it the largest complex he’d ever attempted to buy.
Completing this deal was a massive challenge for Matt’s company. But the process illustrated a few valuable lessons, and we’re proud to present them here. You can apply them to your life, your business, your active investing assets, or your passive investing activities.

1. Strive for Higher Goals

In any industry, a key to long-term success is ambitious goal setting. For sure, Matt knows how to establish lofty yet achievable objectives.
Indeed, the cost of the Winston-Salem apartment purchase was $18.5 million. In the past, Matt had never completed a deal worth more than $8 million or so.
Moreover, this apartment would require $12 million in equity, far more than Matt’s company had ever raised before. In fact, most of its deals required equity in the $2 to $3 million range.
Nevertheless, Matt believed that he and his team members were up for this challenge. They had the tenacity, the savvy, and the drive, and the deal was just too tempting to pass up.

2. Take a Leap of Faith

Matt’s first solution was to obtain funding from Freddie Mac. That lending company provided him with a floating rate mortgage, which meant the loan amounted to less than the total value of the deal. Even so, Matt was able to close the deal with $8 million on hand.
By this point, Matt still hadn’t figured out how to raise the remaining $4 million. Therefore, closing the deal meant taking a leap of faith. It’s something Matt recommends entrepreneurs and investors do from time to time.
Naturally, you never want to take foolish risks. But it can be healthy to start a project while not knowing exactly how you’ll pull it off.
Do you truly believe in a certain project? Are you sure that you have the right team in place? If so, you and your employees should rise to the challenge. In doing so, you’ll discover options and opportunities you never knew existed. Growth is the inevitable result.

3. Change Your Approaches

To raise that $4 million, Matt began with a tried-and-true method. He called and emailed the investors he’d collaborated with in the past — he describes them as his “hot leads” — and he let them know about a webinar he was hosting the following week. About 300 people registered for it. That webinar allowed him to explain the apartment deal in detail.
Matt had hosted many such webinars before. And, as he does with each of them, he sent all the attendees a video recording of the program afterwards. Then he called everyone who participated to follow up.
This technique typically yields $2 or $3 million for a project. That’s just what happened in this case. Thus, Matt still needed to raise about $6 million.
His next action was to simply repeat the webinar technique, contacting his leads to tell them about a second webinar on this investment opportunity. However, this second attempt was considerably less successful. Only about 50 people took part. Yes, this event did raise a small amount of money. But, to cross the finish line, Matt knew he needed fresh approaches.
Matt decided to change things up for a third webinar. For one thing, he promoted it as a COVID-themed presentation. It would focus on how this deal could protect investors during crises like pandemics and recessions. In addition, this webinar would be much shorter, easier to fit into a busy schedule.
Furthermore, ahead of this event, Matt and his team emailed people much more often: every other day, in fact. Of course, by doing so, they were taking a risk. It was possible that a significant number of people would unsubscribe from their email list.
However, in the end, only about 4 percent of the company’s subscribers chose to unsubscribe. That number was relatively low, especially considering that the average rate of attrition for an email list is 1 to 2 percent. It helped that Matt segmented his emails. For instance, out of respect, he didn’t email people who’d told him they had no interest in this project. Similarly, he didn’t send emails asking for investments to those who’d already invested.
At the same time, more emails meant a greater awareness of the upcoming webinar. And Matt made sure that these emails were valuable in themselves. That is, they included information on topics like tax savings, commercial real estate investing security, and the Winston-Salem market in general.
On top of all that, some of Matt’s employees recorded brief videos to explain how much this apartment deal meant to them personally.
This bold new approach paid off in a big way. It’s true that Matt’s third webinar only garnered 100 registrants. But many of his investors, including some who didn’t take part in the third webinar, decided to increase their investments. For instance, one person doubled his backing from $100,000 to $200,000.
People chipped in more money because they were impressed by the company’s new strategy. The informative emails and the COVID-focused webinar convinced them that Matt and his team really knew what they were doing, that they were ready to protect those investments and face modern-day challenges.

4. Don’t Fear Fear

Finally, it’s only natural to feel a little afraid from time to time. New ventures, new goals, and new financial risks can shake the confidence of investors and businesspeople. But Matt says he’s learned to welcome fear. That’s because fear is a sign that he’s outside his comfort zone.
Therefore, by emulating Matt Faircloth, we can overcome our fears. We can embrace forceful goal setting. We can formulate brave and smart plans of action. And we can start taking the steps that will let us achieve our fondest active investing or passive investing desires.
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Sacrificing Short-Term Satisfaction for Long-Term Happiness

If you are into investing and want to make the most from your effort, you must balance short-term satisfaction and long-term reward. Otherwise, you get stuck in a downward spiral from which escape seems impossible. The good news is that you can overcome that problem. Learning the difference and why you should keep an eye on the long-term is vital.

You achieve much more and gain true fulfillment, and you will know you did the right thing. You must explore both sides and gain a true understanding of how these concepts work. Even if you don’t get the outcome you want right away, learning about short- and long-term satisfaction goes a long way toward your goals. The key is to understand how your brain works and to craft a solid plan. With those things in mind, you should have no trouble moving forward.

Active Investor: Learn How Your Brain Works

Learn how your brain works for the best results. When it comes to short- and long-term satisfaction, you deal with the emotional and logical side of your brain. Your emotional side wants a reward right away. In investing, this happens when you want a path that leads to a faster payout. The logical side of your brain, on the other hand, wants you to wait longer for the larger payout. Also, most people look only at their short-term goals by default. You must train your mind to look at the benefits of overlooking short-term gratification in favor of long-term reward.

Make a Plan

Having a plan is vital. Many people go through life without a solid sense of direction. If you don’t have a plan, you have no way of knowing if you are moving in the right direction. You have no way of tracking your progress or knowing where you are. On the other hand, a solid plan keeps you on track and lets you monitor your progress. Every active investor needs a plan, and creating one is a powerful step in the right direction.

Think about what you would like to achieve over the coming months and years, and you won’t have trouble reaching your desired outcome. How much profit would you like to earn over the next five years? What steps should you take to get there? Make an outline of your plan for the best possible results, and you won’t have to worry about too many unneeded complications.

Don’t overthink your plan at the start. You can always change it as you move forward, and most people do. Review your plan all the time to make sure you are on track to reach your goals. This helps you maintain your motivation and ensures you don’t forget anything along the way.

Write Down Your Goals

Writing your goals down is another vital part of the process. Consider all the things you would like to achieve over the coming days, weeks, months and years, and you will have no problem staying on track. Create two lists if you would like to get the most from your effort. The first list should contain all the goals you would like to achieve within the next few weeks or months, and the second list contains your goals for the coming years and decades.

Your goals don’t have to stay the same for decades. If you learn new information or face unexpected issues, your long-term goals can change. Also, you could experience something that changes your mind about what you would like to achieve over the long run. The important part is having a solid starting point so that you know where to go and whether you are getting there.

Do your best to relate your short- and long-term goals. For example, if you would like to make a large purchase over the next several years, putting enough money to the side each month is a great short-term goal. Reaching your short-term goals gives you enough motivation to keep pushing yourself forward, and you won’t have trouble getting the outcome for which you have been hoping.

Consider Both Sides

If you want to achieve the most from your effort, look at both sides of the situation. Short-term satisfaction might be tempting, but it’s not as good as what you could achieve over the long run. Consider that many people get into active investing to make fast money, so they turn to short-term investments. Depending on where you are and what you would like to achieve, this might not be a bad choice.

But you should always take an objective look at both sides. Consider what you could gain by opting for long-term satisfaction instead of short-term gain, and you will be glad you did. Waiting for the long-term reward is not always easy. But you get a much greater benefit if you do it.

The path you take depends on your resources and why you got into investing in the first place. In some cases, you can take and enjoy both paths. Make several investments that pay off quickly, but you can also make at least one long-term investment that grows over the years.

Start Small if You Must

If you are just now learning about these concepts, setting long-term goals is not going to be easy. The way you act and behave conditions your brain. Consider someone who gets up every morning at 5:00 a.m. If that person gets a new job and no longer must get up that early, they still wake up at 5:00 a.m. even without an alarm.

If you spend a long time focused on short-term gratification, you must train your brain to look at the long term. Begin by slowly transitioning your mindset toward the long run, and you will get there without too many problems.

Look Toward the Future

Looking toward the future is critical if you would like to achieve the outcome for which you have been looking. Imagine you are several years in the future. How will that future look if you don’t work toward your long-term goals, and how will it look if you do work toward them?

Looking at the future this way is a powerful step in the right direction. Many people view the future as so far away that they don’t believe it’s important. But your stance changes if you vividly imagine your future. You know you will get there one day, and you get the required motivation to make it happen.

Reward Yourself

Working all the time and never taking time off causes you to burn out. Many investors with an eye for the future dedicate too much time and attention to working all the time. This path might look appealing at first glance, but you can lose your motivation faster than you expect. Avoid that setback by rewarding yourself as often as you can. Your rewards don’t have to be big. Try doing one thing you enjoy each day, and you keep stress under control and maintain your motivation to keep moving forward.

Review Your Progress

If you are serious about sticking to your plan, don’t forget to track your progress. Depending on the size of your company, review your progress at least four times each year. Look at your plan to see if you are on track for reaching your short- and long-term goals. If you are not, see what you can do to catch up so that you don’t stay behind.

Checking your progress from time to time is a powerful way to ensure you don’t go too far off the path you selected. Noticing that you are not on track is not always enough to reach the outcome you want and deserve. If you would like to avoid similar problems in the future, ask yourself why you are not on track and what you can do about it. You can then make the required changes to prevent additional problems from taking place.

Active Investing: Congratulate Yourself

Each time you complete a difficult goal, remember to congratulate yourself on doing the job right. Take some time to appreciate the effort you put into your goals, and you will feel much better about your journey. Depending on what you have achieved, reward yourself with a nice dinner or a vacation.

If you closed a major deal, buy yourself a new vehicle or home. Congratulating yourself is the smart way to maintain your motivation and remember how much progress you have been making. No matter what you would like to achieve, you take your results to a new level before you know it. The right approach gives you a great combination of short-term reward and long-term satisfaction.

Tracking your results ensures you are on track and that you don’t fall behind, giving you peace of mind. Review your progress so that you don’t make too many mistakes along the way, and you will be glad you did. Making the transition in your mind might not be easy when you begin.

Although you might have trouble getting started, things get easier when you gain traction. You will make your life much better and take your profit to where you have always wanted it.

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