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SHOW NOTES FOR EPISODE 388: SO YOU THINK YOU WANT TO BECOME A REAL ESTATE INVESTOR – A VALENTINE’S DAY STORY!
With many real estate investors, it all began with that “light bulb moment” when they realize, all of a sudden – WOW! “I need to be investing in real estate!” But how many really know what that entails? In this podcast, Bill shines the light on the reality of real estate investing — specifically rental property ownership — as he shares the story of his Cuban father-in-law Valentine Rodriguez.
Tip of the Week!
- Buy/send Valentine’s Day Candy/Flowers, do events for your tenants, PM staff, others
- Business-related Valentine’s Day ideas
- It really stands out because most don’t do anything
When Did You Know You Wanted to Become a Real Estate Investor?
With many real estate investors, it all began with that “light bulb moment” when they realize, all of a sudden – WOW! “I need to be investing in real estate!”
Have you had that? What was it that motivated you? And, if you haven’t started yet, what motivated you or motivates you to do things like read books or listen to podcasts, like this one? We all have our story
I have literally have interviewed hundreds of investors – over nearly 4 years of this show – and many have shared their major revelations when they realized that real estate investing IS IT! The solution to my dilemma or the answer to my problem!
The various triggers that caused their revelation are too numerous to mention here but there are certain similar stories. Things like:
- I read Rich Dad Poor Dad
- I couldn’t sleep and I was up late one night watching TV when I heard a Carleton Sheets commercial…
- My friend at work, brother, sister, father-in-law, etc. started investing and…
- I hated my 9 to 5 and I was at a bookstore…
- I was driving my car and heard this commercial, podcast, etc…
- I got fired and…
Regardless of what may have triggered you, I think there are a lot of people within my listening audience that had their own motivation
When I Decided to Become a Real Estate Investor
I was faced with the reality that I was getting older and didn’t really have a “retirement” plan. I had been a missionary for 20 years and never really thought much about it. My wife and I were prepared to serve until we could serve no longer — out in the mission field.
But things change, and as they do in life. And all of a sudden we were leaving Haiti and returning to the U.S… I needed to do something.
I considered the myriad of options and narrowed my choices pretty quickly. I wasn’t going to get far running around with a resume trying to find a job at nearly 60 years of age. But even that statement alone shows why I’m showing my age — no one runs around with resumes any more. You just simply go online, register with Indeed, Monster.com, and a host of other “online recruiters” or “Job boards” fill in the forms, upload your resume and wait.
But I saved a lot of time and heartache by skipping that option all together. I wasn’t ready for a 9 to 5er and the jobs for guys my age just weren’t all that promising.
So I thought, I’ve started businesses before, launched start-ups, know how to run a business. I just needed the right business idea or series of “side hustles” to get me going. Maybe I could even buy a franchise… Launch an online business… Work from home… There were tons of options!
And as I considered my options, I tested out a few, considered others, and started to narrow down to the types of businesses I felt I could realistically do. I was ultimately drawn to the types of businesses that I could do on my own, made my own hours and work as hard or as little as I wanted. I was drawn to businesses that were more “passive” in nature. And I loved the approach offered my Tim in his book The 4 Hour Workweek. I knew, of course, from experience, that realistically, a business would take a fair about of time to start but, at the same time, the last thing I wanted was a 14-hour a day type of business.
It wasn’t until I received an unexpected inheritance check that even started thinking about real estate. When received the check, I was just going to throw it into the market as I had done for years. I had invested in tech stocks and others and had done OK over the years. But at that time, the market was pretty volatile so I considered diversifying – annuities, money market funds, gold, whatever. I considered everything but the market.
The Influence of Other Real Estate Investors and Valentine Rodriguez
I knew a number of real estate guys – developers, investors, realtors – and thought “hmmm, that could be an option, why not invest in a REIT or maybe even a rental property.” I had no idea was I was talking about.
Which brings me to the “Valentines Day” part of this story. One of the people I knew who had successfully invested in real estate was my father-in-law – Valentine Rodriguez. He had done very well with real estate, first as a Realtor/broker and later as an investor and landlord. He was named Valentine because he was born on Valentine’s Day. A Cuban refugee who left Cuba shortly after Castro took power; he was a businessman in Cuba until the government took away his businesses. He knew that if he didn’t leave quickly, he would be stuck there, under a Communist regime, unable to leave under his own free will.
But when his family left, they had to give the appearance that they were only leaving for a short time and not permanently. So he had to bring no money or possessions. They left Cuban on May 26, 1962. (my birthday)
When he arrived in Florida, although he didn’t have anything when he arrived, he went right to work. Staying with relatives, he was worked for a factory, did other odd jobs, anything to feed his family. He and three daughters – my wife Susette being one of the daughters. He was a hard-working man whose first priority was always providing for his family.
He heard about opportunities in California, so when he had saved enough money, they moved from Miami to Los Angeles.
In LA, he set up a screen door business and leased a little building on Whittier Blvd. to work while his family lived in the back. He worked hard and saved hard. Eventually, he was able to save enough money to buy the property which became a clothing store, market and real estate office. And then he purchased a neighboring building. And then, bit by bit, he acquired other small residential rental properties nearby. – a little duplex down the street and then another. As his real estate holdings grew, so did his wealth. He learned how to buy, fix-up, rent out and manage commercial and residential rental properties. He saw the potential of real estate and also learned how to leverage. He eventually got his real estate license and started selling real estate as well as invest. When his kids had grown up and moved out () they decided to move to Florida where he continued to grow his rental property portfolio by buying multifamily properties.
My First Exposure to the “Landlord Life”
Now, to be honest with you, what he was doing didn’t look that much fun. I remember when I was courting my wife, I was visiting Valentine and his wife Ida, and it was raining very hard. He got a call late at night from one of his tenants. Their roof was leaking and he had to go take care of it right away. And me, of course, trying to impress my hopefully “soon-to-be” father-in-law, I said I would join him to help him out. Little did I know what I was getting myself into. We drove down to East LA to one of his duplexes. It had a flat roof and he pulled out something that resembled a ladder but wasn’t really one. And it was raining harder than I had seen in California in 20 years. It was pouring! He pulled a bucket and some brushes out of the back of his car and we proceeded to carry the bucket and brushes up this very scary looking apparatus that resembled a ladder but could not really be called one. He flew up the ladder to the roof. I was a little slower, praying with each slippery step, until I reached the top of the roof. Then, he proceeded to pour big globs of what looked like tar on to this small pond or what looked like a swimming pool on top of the roof. He moved very quickly and I grabbed a brush, just copying what he was doing, to look like I had a clue – which I didn’t. It seemed like it took forever, when it might have been an hour. We both were soaking wet, I couldn’t see from the water running down over my eyes but we had successfully stopped the leak! Yay!
I discovered a couple of things in that experience.:
Number one, my possible future father-in-law was an animal. Wow! Man oh man! He saw what a tough, dedicated and hard-working man he really was — he was unstoppable. Not someone I would ever want to mess with! And the second thing I discovered… I would never ever become a landlord! (haha – famous last words) . Why in the world would anyone ever want to do this? And, if for some strange unforeseen reason I did ever become a landlord – which I never would – I would never ever buy a property with a flat roof!
So, why am I sharing this story? For a number of reasons:
3 Things to Consider Before You Become a Real Estate Investor
- When you’re a new landlord, you never know what you are getting yourself into. I’m sure Valentine saw my struggle on that roof, even though I tried to look like I was confident and knew what I was doing. And I’m sure he laughed when he found I actually became a landlord and was doing similar things trying to keep my rental properties afloat.
- It’s not really exotic cars and bikini clad supermodels in your driveway. Landlording can be rough. I’ve dealt with drug dealers, prostitutes, thieves and lawsuits. I’ve had leaky roofs, clogged toilets, mold, asbestos and you name it! Not that I ever would want the cars and supermodels in the first place, but you need to get a good dose of reality before you step into landlord shoes.
- But it’s not all that bad either! It’s a joy to provide quality housing for people in need. It’s wonderful when someone tells you they love the place they rent from you. It’s also great when the numbers work and the income comes streaming in like it’s supposed to
Not All Real Estate Investing Involves Landlording
Yes, I chose the landlord route, but I didn’t have to. There really are a lot of different real estate investment strategies beside owning rental properties: REITS, deeds, liens, raw land, AirBNB, billboards, wholesaling, flipping, hard money lending, private lending, self-storage, and passive investing in syndications, to name a few.
However, whatever you choose, make sure you do your homework first before jumping in. Look before you leap. Pick the strategy that’s best for you and then learn it well.
To conclude my story on Valentine…
Valentine continued buying properties in California and Florida. His holdings grew. With the money he earned, he helped to get relatives out of Cuba and into the U.S. He’s also blessed his own children, hrandclidren and great grandchildren. His wife and he loved to travel and they have been all around the world.
When my wife and I were considering moving back to the states from Haiti, We decided to take a one year sabbatical to listen to God and decide what we should to do. Before we went the US, Valentine went into a diabetic coma. Susette’s sisters moved him and his wife back to California where he recovered but was much weaker. Even though he was in poor health, he still ended up buying a beautiful home in south Orange County Mission Viejo – part of his legacy.
We came back to the US shortly thereafter and God spoke. We ended up moving in with her parents to care for them, which turned into three years. They eventually went into hospice care. Her mother passed away last year and Valentine just turned 93 today on February 14th! He is confined to bed and this may be his last birthday but he has lived an amazing life! He still lives in the home he bought in California. His expenses are still covered by the rents he receives from his rental properties. And he has a family that greatly loves him.
Valentine left an amazing legacy. A loving dedicated father and husband. An inspiration for many.
Well, that’s it for today!
DISCLAIMER: Many of the above strategies take knowledge and have a higher degree of risk. You need to do your research and/or work with someone who is experienced to reduce your risk.
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