0 to #1! The start of an empire

Hey everyone!  Happy new year!  It's been such a long time since my last post... say 3 months too long!  But I do have great news and updates on the journey.

There is a book written by American entrepreneur and investor Peter Thiel (https://en.wikipedia.org/wiki/Peter_Thiel) called Zero to One: Notes on Startups, or How to Build the Future.  The basic idea is that the beginning of any success is going from nothing to having one (1) and building off of that.

I'm glad to say that I have a house under contract and will be getting that #1 property soon!  That "let's start a real estate empire with #1" property!  As long as nothing goes wrong, I'm expecting to close by the end of January.

Now I'm not really in uncharted startup territory...  Real estate and owning property isn't exactly a new concept and I'm also using traditional/conventional financing at 20% down.  But for me, personally, I have come to the realization that this one property will have to be run as a business otherwise I won't be able to get on the right track for future growth.

What do I mean by that?
When I say it needs to be run as a business, I mean that all the financials will have to be tracked and I need to have a team in place in case something goes wrong.  It can't be treated as a normal investment, like a normal stock purchase is for me... that buy it, set it, and hope for the best.

You see, I can't control the stock market and my understanding of why company values go up and down are limited.  I'm trying to learn to be a better stock investor, and not a speculator.  So that's why I'm in the real estate game.

Currently we're looking to find tenants for the property, and that means it should be income producing on the 1st year of service.  That also means that I'll have a running list of expenses and reserves that I need to account for - think new roofs, windows, etc.  Income/revenues and expenses/capital reserves??  Sounds like a business to me!

Now what?
So now that I have #1 - I'll update when it's actually closed and on the market to be rented out - my goal now is to get at least 5 more in 2016.  I'd also rather use OPM (other people's money) to finance these purchases so I'll be looking at other ways to make it work out.

I'll also start updating more often to keep myself accountable to this blog haha.

E-mail/message me if you have any questions!

Thoughts on student housing @ Binghamton!

Sorry for the delays in posting!  I've recently thought about doing some student housing - so here's an intro to what I think are the pros & cons of it... Thoughts and comments are welcome!

8/17 Recap!

It's been a while since the last blog post and quite a lot has happened since!  Last time, I told you guys that I was going to Tennessee and here's how that trip went.

We started out deciding to drive from New York to TN as a cost saving effort, and that took over 16 hours and 1 time zone to drive!!  I think a flight from NY --> TN was about $350 per person and we had 3 people, so the cost of flying out there would have been over $1,000.  To drive to Tennessee, we spent like $200 on gas, Dairy Queen, etc.  You could try to figure in the opportunity cost of driving down, but I think that we did spend our time on the best use.

Driving down was a pretty big commitment on our part to do the due diligence necessary to make a solid investment decision.  Without knowing exactly where our investments will be, which block/zip code it will be on, what the surrounding houses are like, what the neighbors are like, I wouldn't have the faith and courage needed to pull the trigger and fully invest in Tennessee.

When investing in out of state real estate, the most important thing that I've heard and subsequently learned is that you need "boots on the ground".  Some guy/gal who is 100% local and knows the market and has prior experience.  On the flip side, you could invest in your local market and you'd be that person.  Either way, unless you have that local knowledge you'll be somewhat limited in your market.

Let's take a look at the above statement in bold.  Why is that the case?  Here's a progression of where I was prior to going there and meeting out local guy:

• Go on these websites searching for real estate
• Finding "cheap" properties in 
• Wasting time analyzing some of these "cheap" properties - like searching how much rent & expenses should be in each zip code

The problem are these "cheap" properties.  You think it's cheap because the price point is low so it's sort of attractive.  However would you be comfortable investing in what some people call a "war zone" area?  That doesn't sound fun to me...  Also how would you know exactly how much these properties could rent for?  Do you have existing rents for the area?

Without knowledge of all of the above (those are the bare minimum you need to know) you can't really have the faith to put your hard earned money in an investment.  So what I suggest is going on a website or asking around to find someone who lives in an area that interests you.  Ask them to lunch/dinner or a phone call.  This is one area that I am working on too so if you need motivation (as do I), let's keep each other updated :)

Part ii (real this time)

Here's the link for part ii of my recent vlog post. Thanks for the feedback so far and I'll work on makinh changes in the future!

https://youtu.be/c586HeCVtRU

Recent thoughts - vlog part 1

Hey all,

I updated using a video log. I think it presents my thoughts in a more precise and authentic way. Let me know what you think.

https://youtu.be/qLcHfU6Cr0k

First Week of Action!

This past week has been a pretty good week.  I think I'm moving towards my goals.  A few "firsts" have occurred:

1. First call to a real estate agent - he is a guy from Nevada that my parents worked with before so we had some common points.  Very friendly guy and also an investor, which is important.  He knew what exactly what my family and I are looking for in a property.

2. First walk-in to a real estate brokerage firm - they're local.  I went in there on a whim because I had seen it before and always thought about what they do.  So I bucked up and went in there with no idea what to say.  I came up with stuff on the fly, like "how's this area", "what is the rate of return on local properties", etc.

3. First call with a wholesaler - these guys buy properties, repair them, and put them on the market again.  After you buy the property, they will also do the property management and finding tenants for you.  Again, totally new situation where I had no idea what to say and learned a bit about the industry from them.

What I took from these situations was a bunch of info that I had no idea about earlier.  I may have found out some of this stuff with a bit more research, but I like the people interaction part of real estate and gaining knowledge from a local guy in 5 minutes beats reading 30+ minutes online for the same thing.  All I had to do was ask.

I think that I was help back from doing these things before because I was scared.  I had that fear in me and it's completely normal.  After listening to the 10X Rule and learning that fear is a good thing, I just acted on that fear.  Having fear means that whatever you're scared of is what you should be doing.  Obviously there are limitations to that (let's not use any crazy/extreme examples here), but the idea is that we are usually held back because of fear when we should be going all out.

Thanks for reading guys and enjoy your Friday :)

George

"If you love your work, you'll be out there every day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from you - like a fever." - Sam Walton

Goal Setting & Reaching Them (or not... but that's OK!)

So I listed a few goals last week that I want to go back and reflect upon:

• Meet people at this networking thing..... DONE.  I was at a networking event so I tried to bring up investing in each conversation, which was a bit forced, but I did get some positive responses.
• Write at least 2x a week on this new blog............. not so done
• Buy a multi-family apartment that cash flows....... not so done yet

And looking back on these goals, what I think of is I should always be working towards these goals no matter what happens.  Good or bad, happy or unhappy, I should always be working towards my goals.  Now most of those are along the lines of financial goals, which is fitting for a real estate blog.

My other goals are more personal development focused and they include:

• Reading a book a week (credit to Tai Lopez for opening my mind to how much I could be learning).  What's fascinating is that I learned that I shouldn't be limiting myself to one type of book, like business only.  I have a bunch of self-improvement / self-help books but I'm also reading economics and evolutionary stuff.

• Writing my goals at least 2x a day.  This is kinda weird writing about it as I do it, but I think it's great to keep on reminding yourself of your big goals.  And that leads to...

• Write BIG goals.  I was listening to a BiggerPockets podcast that featured Grant Cardone, author of "The 10X Rule" and his philosophy is to have big goals that are almost impossible to achieve.  This way you have something to always strive for that's bigger and better.  When you achieve the reasonable goal, it's as if you've sold yourself short.  When you go big (my goal is $500 million in real estate), it keeps you focused on your end goal.
• Listen to it here: BP Podcast w/ Grant Cardone - the 10X Rule
• btw I'm waiting for the 10X Rule to arrive on my doorstep but it's taking forever...

So onto real estate... today was also my first time calling a property management company.  I am looking to invest in Colorado where tons of people have said it has peaked already... BUT it's still cheaper than New York metro area.  I'm not just buying on price though; I'm currently in my due diligence phase and I'm spending time reading up on the market and economic trends and what not.  

At first, I thought that doing the due diligence and everything would take ages.  Reading through endless PowerPoint slide decks and multiple reports, but it really hasn't been that exaggerated so far.  I listened to Chris Clothier's (http://www.memphisinvest.com/) speeches before and what he said really stuck with me.  It went something like "it's your hard earned money so you have to know what you're investing in". (misquote right there...)  

As part of the due diligence process, I called a property management company and it was pretty standard.  They were very professional and said they would take care of everything.  I was sure to ask about different types of fees that would be involved and I think I got a decent feeling about them, well as much of a feeling as you can get from thousands of miles away.  But I know that I have to go and talk to more companies to see what other options are available.  

Overall, I think this was a good first step though :)