Get your started today and sign up below:
no images were found
This past Saturday was a pretty big day for my radio show, Pieces of the Puzzle: Journeys in Creative Real Estate Investing. After a successful year on the #1 am talk radio station in Memphis, 600 WREC we moved to a smaller station to tweak a new, 2 hour format. This also went well, but we were recently invited back to WREC to take a permanent 2 hour afternoon slot on a Saturday. An honor in itself, we were also very thankful to be moved to the afternoon spot(syndicated programming) as opposed to the morning slot(block programming – think infomercials.)
To celebrate this move, I asked Catherine Austin Fitts, the former undersecretary of HUD under George Bush I to come to Memphis and spend the whole 2 hours discussing economic recovery, state of the nation, what is happening in the markets, and a host of other issues. The phone calls came in nonstop, and emails have also come in this week. Moving back to the #1 radio station was a great move for us, but the really interesting conversation came later in the evening, where we hosted a reception for the former HUD Undersecretary and some close friends and colleagues at our Memphis home.
I found myself outside with a good friend of mine that I used to teach with I used to teach with in the Memphis City Schools outside and discussing the stark differences that our career paths had taken. He is still teaching with the Memphis City School District, a solid job with full benefits, and with his wife recovering from lung cancer(truly having beaten the odds), the stability of his profession has been a real blessing to his family. But he likes real estate a lot, loves it actually, and was basically saying that he wanted to begin pursuing the career path that I had taken so long ago. That path, on the other hand, was stepping off the cliff edge, leaving the job with benefits, having no health insurance, and working as a property manager 80 hours a week in the hopes of ‘learning the ropes of the business.’ Unfortunately, looking at the Robert Feol today, from afar, may seem to be the true Ugly Duckling story incarnated(with a great ending); Robert Feol now doesn’t have a boss, doesn’t have a job, has a successful radio show, makes good money, married the beautiful girl, owns a nice portfolio of rental properties, and so on. These things seem to be the symbols of success, assurances that you too can take the dangerous plunge off the deep end of sanity and dive into real estate full time and have a successful outcome. Yet, all that glitters isn’t gold, and having material things on the surface don’t always indicate that the road was smooth an obstacle free. I tried to tell my friend that.
‘But Rofe’ he said(his nickname for me, a contraction of RO bert FE ol), ‘you have done it! You have arrived. Look at your home. You have the former Secretary of HUD inside your house right now talking to your investment broker friends. This is THE LIFE!!!’
But is it? Is real estate investing just a massive pot of gold waiting to be taken from under the rainbow?
I have often heard that the true measure of success in becoming a millionaire is NOT the money itself, but the type of person that one has to become to truly learn how to handle the money, and the nature of a person’s character, how it had to change, to learn the responsibility of handling the money and the diplomatic skills necessary to protect the earnings and also be able to tithe them to the right causes. While I do personally believe this is true, I also believe that there is a fascinating, yet very disguised and difficult series of obstacles that someone who seeks to be a full time real estate investor faces, a journey which is laden with MANY obstacles and may take you to the edge of bankruptcy and worse, before you begin seeing the fruits of your labor, assuming that you actually DO.
Don’t believe me? Well, being a real estate investor is not all peaches and cream. Consider the massive amount of investment and expenditures that are made to:
1) Your financial situation – you immediately stop being bankable when you leave your job, so plan on NEVER going to a bank and getting a loan, pretty much. If you think your real estate career of brilliance hinges on a bank giving you loans because you have great credit, think again. Fully employed people are struggling to get loans right now, and you will HAVE NO INCOME once you leave your job.
2) Your friends – your friends will rarely see you. You no longer have a boss, which means you need to work three TIMES as hard as you did, with way longer hours. It isn’t just ‘sleep in every day and eat bon bons.’
3) Your sanity – if your car breaks down and you have a job, you are always roughly 2 weeks away from a source of funds. When you no longer have a paycheck, AND your car breaks down, if you do not have the liquid funds, you either tap credit or figure out a way to pay for it – and, if ‘paying for it’ means ‘generating a new transaction’, plan on stressing out ALOT. Real estate transactions start as a theoretical in your mind, and then are made manifest through your actions. Transactions take TIME. But if you are under duress(OMG MY CAR BROKE DOWN AND I HAVE NO MONEY), it is hard to think rationally, with the kind of surgical business savvy you need to have to architect truly win – win situations. You will be struggling to slap a deal together, or worse – make some bad decisions.
4) Your health – if you think your health is stymied at the job you hate, try going 12 – 15 hours a day with your phone ringing nonstop, or you having to make calls to try to establish the relationships necessary to access the inventory you need to make the money you are hoping to. Working out(meaning exercising) becomes an afterthought, and days turn into months and months into years. Ask me how I know this. What was yesterday’s postponed trip to the Yoga studio becomes tomorrow’s unnecessary interruption because you have so much to do – and it never stops. Try staying under that physical and psychological duress for 2 years, and see how you feel.
5) Your family members – if you thought you had relationships that were strained before you became a real estate investor, imagine how it is when you start buying houses and doing things that make you look like you are from another planet, in the eyes of your family. They will accuse you of changing, and in fact you have – you have become financially more literate – which makes the accusations of ‘money has changed you’ all the more true.
6) Your relationship with your spouse – lots of stress will me induced into your marriage from your choices. And, should your spouse be unsupportive of real estate or your choice to purse it, you are in for a difficult road until the checks start to come in – which CAN be a very very long time.
7) The way people rely upon you – if you are building your business correctly, people will begin to ask your advice on real estate and finance in a way that is uncomfortable, to say the least. You will be asked to start assisting people with financial planning, retirement, and also will be sought out by people in extreme financial duress. Your time becomes even more limited, as you find yourself inundated with requests from people who want your help, but can offer nothing in return.
The list doesn’t really end here, but what I was trying to say to my friend Jon that night which is difficult to summarize in a single conversation or article like this, is that the type of journey which you inevitable have to embark on in this business, should you choose to pursue it other than a part time hobby, is a long and arduous one, fraught with perils, and even worse is the fact that not everyone makes the finish line. Not every investor who starts out in this business tells a story with a happy ending, which is in fact the EXCEPTION, not the norm. Many a would – be investor has fallen to the wayside and become insolvent by a single misstep, one bad purchase or sale, or judgmental error which places them in irreversible jeopardy from which there is no exit. The cost and potential catastrophic perils are substantial. And unfortunately, most people who say they want to become real estate investors(or ‘financially free’), are not truly willing to pay the tolls necessary to get there, or worse, are unaware of what those costs even truly are. My friend Jon asked that night for my honest advice, and this is what I said to him:
Be sure you are willing to pay the price before you get started.
But here’s the real question:
Do you know what the true cost of your journey really is? And, if you do not, how can you be willing to commit to such an unknown price?
Think about that the next time a platform speaker is trying to sell you a sixty thousand dollar(‘impossible to fail’) package you put on your credit card that will solve all your problems.
We are the experts and we can help. Call (901) 258-6944 for details.