I’ve tried on a lot of company hats… They’ve never quite fit.
My “hats” took many forms.
In college it was the Braum’s apron, the lifeguard’s shades, the barista’s espresso machine, the sports photojournalist’s camera, and the newspaper reporter’s pen.
After college, it was the television producer’s headset, the administrator’s telephone, the analyst’s spreadsheet, and the sales manager’s rolling briefcase full of chotskies.
I’ve always done my job. I’ve climbed the corporate ladder like a good suit should – but I lacked passion. My inner critic and desire to succeed kept me on task, but my heart always begrudged the hours lost waiting for doctors’ signatures for samples, or giving presentations to offices about pet food or toothpaste.
The paycheck – though generous – wasn’t enough.
The company car wasn’t enough.
My life wasn’t enough.
It’s not that I wasn’t grateful for a secure job with a stable company. I learned a lot from the experience and training I received. However, what was I losing in exchange?
For example, I loved taking our therapy dog to visit kids at a Florida hospital. I could only take her during business hours per hospital policy. I had two-weeks vacation per year. Yet, seeing those smiles on the kids’ faces was worth giving up those two weeks in half-day vacations spread throughout the year so we could go visit them. The cost was that I never got to visit family back in Arkansas or travel and take real vacations.
Why should I have to make those choices?
Where was all my time going? What was my impact? What was the meaning of all of those sales numbers and percentage growth projections?
Instead of fueling my inner fire, it felt like a wet blanket kept putting it out.
There was a reason these hats didn’t fit. I was an entrepreneur at heart and I needed to create my own hat.
I’ve always wanted to do real estate. I’ve dabbled in it with side jobs – in addition to my day job – in loan origination and door knocking. Yet, my main jobs kept me too busy to really pursue it full force.
This summer, after literally feeling like we had lost everything and wasted over a decade of our lives, my husband and I made the leap in a completely new direction.
We started a real estate investment and redevelopment company.
Maybe it’s because we’ve gone through enough fires to no longer fear failure.
Maybe it’s because we know the safe route doesn’t lead to happiness, because we’ve already tried it.
Maybe it’s because we’re crazy.
I don’t know.
However, I do know I will always be asking “What if?” if we don’t try.
I’ve already gotten a taste of starting up a new business. In 2012, I started my own writing company when I joined my husband overseas.
It began with a lot of free articles that seemed to resonate with people. Then, I started charging a little bit, and then a little bit more.
Now, I’m making a good living writing – which I happen to love! I’ve traded my two-week vacation for the ability to do my work from anywhere with an Internet connection. I lived two years on a tiny Caribbean island and enjoyed a life where my schedule is free! I’m no longer tied down! I never have to ask a boss if I can have an extended lunch break to meet a friend! My time is now my own! It’s glorious!
However, I’m still trading my time for money. If I don’t devote a portion of my day to writing, I don’t get paid. There is no residual income with the way the business is structured now. I don’t plan to give up writing since I still love it! However, I also want to explore other options.
Which leads me into the reason we decided to move on to an even bolder venture.
All investment involves some risk. Just ask anyone who does day trading or invests in the stock market. However, real estate offers fewer risks and, in my humble opinion, greater rewards.
Real estate has both active and passive components. For example, if we buy a run-down house and fix it up and sell it, that’s active income. We get a profit because we forced the appreciation through rehabbing and turned an ugly house into a nice home that someone would buy.
However, you can also hold real estate and rent it out for passive cash flow. If you factor in enough spread to hire a property manager, they handle all aspects of renting out and managing the property, and you simply collect the income from the rent checks.
I like that you can develop both sides of this business. While we are still fairly young, we can work the active side of the company while quietly building the passive side for when we decide we want to stop working so hard. It’s a great long-term strategy.
However, whether we’re pursing active or passive investments, here are seven reasons why we chose real estate!
Sure, home prices fluctuate. However, real estate follows a very predictable cycle. The key is to know where you are in this cycle, and modify your investment strategy accordingly.
I can remember looking at our IRA account a few months apart. We’d lost $5,000 as our blue-chip stock went down after a poor earnings report. This type of stuff is completely outside of our control. I hate that!
Sure, you can put your money in a mutual fund for a measly 2% to reduce the volatility of the ups and down of individual stocks. However, you’re lucky if you can do much better than keeping a little ahead of inflation. Who has time to wait around for that?
Real estate investments are just the opposite. We control the entire project and we plan for market dips by understanding the cycle. We also get much better returns than 2%!
When you buy a stock, all you get to see are the number of shares on your investment dashboard. While it’s certainly less maintenance, it’s also not as fulfilling as driving up to a house that you own, that you can touch, that you can live inside.
If you buy smart and get good insurance, even fires or floods won’t cause you to lose your investment.
Here’s the thing. We are NOT rich. What little money we had went into our real estate education. If you’re willing to learn and do your own due diligence, you don’t have to be rich.
Here’s the other great thing! We get to pay other investors to use their money and give them a much better ROI than most traditional investment vehicles. They also have their investment backed by a tangible asset (they get ownership of the property in the worst-case scenario) and they can often get double-digit returns – far exceeding most stock market or banking investments – on their loan. I can’t wait until we are in the position to loan our money out to other investors and experience these same rewards!
It’s a great partnership! The person with funds to loan out – but often no time or education in real estate– pairs up with someone with knowledge of how to redevelop houses and find great deals, and the time to manage the project. People can even utilize their retirement accounts to buy real estate without pulling their funds out of the account! We do all the work and they get passive interest for letting us use their money. It’s true a win / win partnership.
Real estate redevelopment creates a large ripple effect. You have so many other industries that base their bottom line on the activities of investors. For example, builders, agents, home stagers, landscapers, painters, and property managers all need investors to make a living.
People will always need a place to live. The iPhone may someday go the way of MySpace, but people will always need land and a place to call their own. If you learn this business well, your investments will be secure for generations to come.
Investors have gotten a bad rap over the years – and for good reason. Many people in the business were greedy and unethical. However, the concept of investing can also be an agent for good. Just like the Force – there is a dark side and a light side. (Yes, I’m a Star Wars nerd; but just for the original old-school early movies! Don’t get me started on the prequels!)
Imagine the investor who knows how to fix people’s credit and has relationships with loan officers who can work with hopeful buyers to help them qualify for a home. Or the developer that goes into a rough neighborhood and creates better living conditions by building beautiful homes from the broken-down dwellings. Maybe there is an investor who is able to take someone who is facing foreclosure with an upside-down mortgage and instead negotiate a short sale – reducing their credit damages and ensuring the bank doesn’t go after them later for the default amount. Or, better yet, an investor could have the knowledge to bring their loan current, fix their credit and help them avoid the process all together!
That’s what an education can do! It’s powerful! It can change lives!
I think investors can still wear super hero capes. Not everyone in the business values profit over people.
People often like to paint worst-case scenarios in real estate. Can you lose your shirt? Sure! The risk happens when you don’t buy smart. Here’s a typical exchange.
“But, what if you can’t sell the house?”
“Well, ideally you would buy distressed homes well under market value after accurately estimating the repairs required and deducting holding costs, closing costs and realtor fees while still factoring in your overall profit. If you had to sell it fast, you could simply cut into your profit margins and just make less money. But, ok! We can play that game!”
“If you can’t sell it, you make sure that you bought at a price low enough to rent it. You simply secure financing so that your payment is lower than market rents.”
“But, what if the price is still too high to rent it out?”
‘If the price is too high to rent it out, you set up an owner-financing contract. Let’s say that someone can’t get traditional loans from a bank. There is actually a large percentage of the population that has poor credit due to downsizing, medical bills, divorce or death of the primary breadwinner. I personally think these people still deserve to own their own home. You simply find someone who just had a bad run of luck, and they pay you like a bank to live in your house. Just like a bank, you take a down payment and a portion of their monthly payment goes toward the home purchase price and the rest toward interest. They pay this for a set period of time (usually three years) while you show them how to fix their credit and qualify for a bank loan. Their payment more than covers your financing commitment to the bank. You then sell them the house after the time period is completed for the agreed-upon price. Everyone wins!”
Here’s the thing, the investors who got caught with their pants down during the 2008 crash were buying on appreciation speculation. You may as well invest in the stock market if that’s your strategy. The investors who buy below market value based on strong data and good numbers don’t end up underwater.
Don’t get me wrong! Real estate does appreciate; but a smart investor doesn’t count on it, they just enjoy the bonus!
I realize that real estate isn’t rocket science, and it’s certainly not for everyone! Yet, it is a way for me to feel like I’m making a positive impact on other lives while growing an investment portfolio with my husband that will feed us into our golden years.
I can honestly say that my worst day as a real estate investor – building the business with my best friend and partner – is still better than my best day at all of the other jobs where I wore someone else’s hat.
What about you? Do you feel like your hat fits your heart?
If you enjoy working for others and have found your calling, that’s amazing! Not everyone wants to be an entrepreneur or build their own business! Just find what you love, dig your nails in deep and never let go!
Yet, if you haven’t found your passion, what’s keeping you from it? Is there something that’s burning just under your conscience day-to-day routine? Something that makes you feel alive? If there is, go out and follow that love! Find a way to make a living at it!
If every day it’s tougher to get out of bed than the one before, if you discover you no longer find fulfillment in your job, then change it. If you find you don’t like the story that you’re in – leave! Don’t wait a decade like I did! If there has ever been a burning in your core to jump into something that scares you senseless, that defies all logic, that replaces your security and a steady paycheck with energy and excitement – do it! This life of risk is so much better than slowly dying inside daily because you’ve traded your sense of adventure for a pension plan.
It’s a proven fact that those who love what they do become the best at doing it. Now, I’m not gonna lie, if that means starting up your own company instead of sticking with more traditional work – you may be poor at first. You may have to work 80 hours now to avoid working 40 hours for someone else for the rest of your career. People may call you crazy. You will become a rebel as you buck the traditional system of “go to school, get a degree, get a job.”
However, I can tell you from personal experience that there are worse things to be than a poor, hardworking, crazy rebel. You’ll find you’ve never been happier than when you’re living your dream and creating a hat that’s custom-made to fit your heart.