I grew up in a family of entrepreneurs. My dad had his own plumbing business and my mom combined freelance reporting for a radio program and being an artist. The conversation around our dinner table was about business and how you can do or have anything you want with no restrictions. People develop traits and habits from their environment and the conversations that happen in that environment. My family was always reaching for new ways to do things, brainstorming ideas, and moving out of the comfort zone and into action.
Dad once bought a duplex. Our family of 10 “camped” on the front porch for several months while he was remodeling to make one big house large enough for our family. That type of thinking and attitude taught me to have courage and to dream big, go ahead and try it, and develop whatever I desired. I saw and heard how to grow a business. In fact, all the kids in our family turned out to be entrepreneurs.
Early on, I knew that the owner of a business was in the position to make a profit, not the employees. It was simply a matter of HOW the business was handled. I’m talking management, strategy, sales, productivity, initiative, and more.
First, I went out into the world and worked for other people, helping to build their businesses. After about 7 years, I knew this was never going to get me where I wanted to go, to that place of freedom and wealth. So I went back to college and developed my first business–a publishing company. I did the market research and created a magazine from scratch, developed a market stream, got subscribers and ran that business for 20 years. It was a lot of hard work with long hours, and I made a decent living.
And then, an opportunity showed up! There was this crazy deal that could get me out of the rat race. All I had to do was figure out a way to get $50,000. The deal was to buy a condemned triplex in the city, yes condemned. All I needed was $50,000 and it would be ours. How could I NOT do this? There was such a huge profit to make after fixing up the property. My mind was ticking. We could make $50,000 all in this one deal, more than we had made altogether in the previous year (1990)!
You see, I had an idea and the timing was right. The idea stemmed from a desire to live a bigger life. A different life that included…
- Never having to worry about money
- Buying whatever I wanted when I felt like it
- Owning the latest gadget and using it to have fun
- Freedom, time to do whatever I wanted
- Enough money for retirement
- Spending time with my family
- Being in charge of my own destiny
- Traveling to exotic faraway places
In fact, I could just see myself, sitting on the beach sipping a cool beverage and feeling fully alive. That feeling of knowing…knowing that something was happening, money was accumulating, the businesses were handled… it would be MY time. Time to do what I love, give back to the community, and be there for my family.
My mind was set, there must be a way. Okay, I made a list. Who do I know that has that kind of money sitting around? My in-laws, a rich friend, think…Who do you know?
My husband at the time was a contractor doing full rehabs of duplexes for a real estate investor. He rehabbed the properties for a fixed bid amount and when I figured it out, he was making $9.00 an hour after he paid all the subcontractors. There had to be a way to get on the other side of the equation. We needed to be the investor, not the contractor. The investor was making $80,000 to $120,000 per multifamily building in cash that he took out when he refinanced them. In addition, he kept some of these buildings, capitalized on them and became a landlord. This way he also made money on the cash flow from rental income. This is an ideal way to leverage a property. It’s a formula, and it was calling me into action. I could do this too.
Back to the original problem, where was I to find $50,000? I put together a business proposal and went out seeking funds. I asked the in-laws, a rich friend and several others. The answer was NO. This is where the INVESTOR MINDSET came to the forefront. I was still dreaming of the outcome, real freedom and no more worry. I had to make this happen. I kept looking outside the box. How?
Remember, I’m in business with a contractor. We had built a new house a few years prior, larger than our budget, with extra square feet and several projects unfinished.
The question became, “How can we leverage this house?” It would cost around $4000 in materials to put a deck and a screen porch on the house. They were already part of the design, so we shifted gears. Where would we get the $4000 to build the deck? This time it was easy–credit cards. Then we went to work, with our own sweat equity. We did all the labor ourselves, with help from a few friends. (If you’re in real estate, you can bet that at some point you will be contributing sweat equity, even if it’s picking up the garbage.) We built the deck and screen porch and got a home equity loan for $50,000.
This was just the beginning. We leveraged that to buy the triplex and fix it up. By the time it was complete, every credit card was maxed, we were eating anything left in the cupboard, and the bills were behind. We rented out the three units and hurried to the bank for a refinance of the property. With a check for $135,000 we were on our way to real estate riches. The best part was we still had cash flow after that new monthly mortgage payment was made. In it for the long haul, we kept that building for over 10 years, cash flowing all the time, refinanced it twice and sold it for a healthy profit.
That’s what I call a way to compound money. Ahh…real estate. Now, aside from the deal, there was a much bigger thing going on. What?
I was developing my Investor’s Mindset and wealth building practices. The next deal was already lined up, a four-plex with great potential profits. And with all the mistakes we had made on the first project, imagine how we could improve on the process. We were already starting to build a system. Any first time real estate project is prone to mistakes. This one had the new furnace stolen one day after it was delivered, a small kitchen fire while rehabbing, and mega time delays from inexperience. We figured it out and kept moving forward with our eye on the prize – cash flow.
What I’m talking about is mindset. Ever wonder why some people seem to always be making big money and other people are just getting by, paycheck to paycheck? Which one are you?
If you are trying to figure out how to make it big in real estate, you must pay attention to what is going on in your head. Mindset is a fixed mental attitude or disposition that predetermines a person’s responses to and interpretations of situations.
Did you know that 97% of all millionaires made their money from investing in real estate? The key to building wealth is to have multiple streams of income.
It all starts with your mindset as a savvy investor! You must have the confidence and ability to take the action necessary to have wealth. You must BELIEVE you can be wealthy. Money and wealth are a byproduct of pursuing powerful goals. People acquiring wealth operate differently than those who have money troubles. And it starts with the right mindset.
Back to my story…there were many more real estate investments through the years after the four-plex mentioned above. I learned something valuable on every deal, and I maintain that investor mindset to this day.
As a master coach and consultant, I help people figure out their financial leverage position and then decide which strategy works best for them to grow a real estate portfolio or business. What is your mindset regarding real estate?
You can do this. I can help.