350: Leaving a Legacy

SHOW NOTES FOR EPISODE 350: LEAVING A LEGACY

For many real estate investors, the idea of “leaving a legacy” is an important aspect of their long term business plan and vision.  Creating a real estate portfolio that can benefit your children, grandchildren and even your favorite charities can be a great way of giving back.  The question is:  When you pass away, do you want your business to continue to benefit your family or be cashed out for short-term gains?  In this episode, Bill examines the idea of creating a legacy, both from a personal standpoint and for your family’s future.

Tip for the Day: AirBNB!

• My three AirBNBs are doing amazingly well
• They have become one of my most lucrative real estate investments
• You can do AirBNB even if you have very little money
• Think of how you can can tap into this lucrative cash flow monster!
  • Do you have properties where you are having trouble keeping tenants?
  • Do you have an extra room, basement, guest house in your home?
  • How about a piece of land you never use where you can put a trailer, yurt, tiny house, tree house or tepee?
  • You’d be surprised what people will book on AirBNB!
• We will be sharing more stories in upcoming podcasts and articles of how you can tap into AirBNB as part of your real estate investing strategy

Leaving a Legacy

• We talk a lot on our podcast about creating a real estate portfolio that you can leave as a legacy to future generations
• Passing down an inheritance or gift to benefit your child and/or children’s children
• But not just passing down something that will be cashed out and spent, but something that can be sustainable (if handled properly) and that can help them to achieve their lives’ dreams and aspirations

The Definition of Legacy: https://www.merriam-webster.com/dictionary/legacy

Often when you think about legacy, it’s something that is left behind after a person has passed.  Legacy is more about sharing what you have learned, not just what you have earned, and bequeathing values over valuables, as material wealth is only a small fraction of your legacy.

Wealth Legacy vs. Life or Family Legacy

• It can be something physical or financial
• It can also be intangibles
  • Family traditions
  • Values
  • Morals
  • Beliefs
  • Work ethics
  • Something learned

Life Legacy: What Makes us Who We Are?

• Often who we are today is a direct result of who are parents were and how they raised us or who ever raised us
• That can be part of the legacy that is handed down
• Sometimes what’s handed down benefits us
• Other things passed down can be negative
  • My dad was a workaholic
  • I was a workaholic
• Passing good things down to your kids that will affect them forever
  • A heart for others – compassion
  • A love of nature and God’s creation
  • Integrity
  • Commitment to marriage
  • Being a good steward of your finances
• If you live a life your children admire, they want to be like you and emulate your best traits

Wealth Legacy: Tangible Gifts We Can Pass On

• Part of the appeal of real estate investing for me was the fact that I could create something tangible AND sustainable
• It’s not just like a bunch of money that will be spent and gone
• A rental property investment portfolio can have long term benefits for those who know how to manage and maintain it
• That’s the key!
  • How will your kids know how to manage and maintain it?
    • This is the real trick to passing down a “gift that keeps on giving!”
• All or part of your legacy can also go to a favorite cause or charity

How Will Your Kids Sustain Your Real Estate Enterprise After You’re Gone

• Start with just talking with your kids:
  • Sit down and let them know what you would like to do
  • Let them know if they just want to cash out, that is their collective decision and they can do that
  • However, point out the advantages of maintaining the business:
    • Can provide them with ongoing income
    • Can provide them with a job when they need it
    • Can fund an education, a wedding, provide down payment for their first home or provide funds to launch another business
    • Can generate large sums of money that they can access to
    • Can be leveraged to do or acquire other things
    • Can be something their kids can benefit from
    • Something the kids can do together
• They can manage it or hire someone to manage it
• Meet them where they’re at!
  • If their interests are in other “non-real estate related” areas, try to show how real estate investing can help them fund and achieve their dreams
• Show your kids that you enjoy the business
• Let them enjoy the benefits today so they will want more of the same in the future
• Have your kids work with you in your business during summers so they can earn some extra money and see how things work
  • It’s also a great opportunity to share “dad or mom time” together in the “family business”
  • Have them do some of the tougher stuff like analyze a property or market, calculate cash flow, etc.

Starting Early

• Read your kids the Kids Edition of “Rich Dad Poor Dad” or the Teen Edition
• Play Monopoly and share “real life” real estate stories when you play the game
• Buy Kiyosaki’s “Cash Flow 101” board game and play it together as a family

How To Make Your Real Estate Business Sustainable

• Create systems and “operation manuals” early on so the business can be easily taught and maintained
• Hire good property managers so the kids won’t have to deal with “tenants, toilets and trash” (well, at least most of the time)
• Create a “manager” or “director” role Job Description early on so that that can be the primary person to manage the business
  • One of your kids could eventually take that role or you could hire someone outside

In Conclusion

Whether you own a few duplexes or hundreds of doors with apartment communities, think about the legacy you would like to hand down and start planning today so that it can be a reality tomorrow.

This show was sponsored by SMARTMOVE

SmartMove is part of Transunion, a trusted consumer reporting agency with more than 4 decades of experience.  They built an online screening service for independent landlords that delivers critical credit and background reports to you in minutes. It is a really valuable tool to have when you are trying to decide who to put into your rental property.

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See why 9 out of 10 users recommend SmartMove and more than 4 million landlords have used SmartMove to make better leasing decisions.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com