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SHOW NOTES FOR EPISODE 482: WELCOME TO 2021 – ARE YOU READY TO GENERATE PASSIVE INCOME?
So what are you going to do in 2021? The country, the economy and real estate market have all experienced major changes. How will that impact your real estate investing in the new year and beyond? In this episode, Bill shares some of his personal goals as well as explaining what “true” passive investment means.
Intro
- Good to be back!
- It’s good to take a roughly one month break each year from the podcast. It also me to just step back from the busy podcast schedule for a time of reflection, rest and to spend some quality time with the family. It also gives us an opportunity to showcase some of our most popular podcast episodes – some you may have missed over the years!
- I also have time to focus on my personal 2021 Strategic Action Plan.
- I hope you all took time to put together your strategic plans – it’s still not too late!
- I also did something new by launching our first-time Haiti Holiday Fundraising Campaign. It was really fun and I think I’m going to do it every year! Thank you to all of you who contributed!
- I wasn’t sure how it would be received by listeners but we did pretty well.
- We raised $1,900. Not quite our goal of $2,500 but it still helps the kids nonetheless. I REALLY want to thank all of you who contributed. Thank you from the bottom of my heart and on behalf of the kids!
Weekly Tip – Terminology: “As is”
- The term “as is” is used by the Seller of an asset to disclaim any and all warranty and representations regarding the item being sold.
- The Buyer inspects the item, and if he buys it, he assumes all risks from that point forward.
- The concept usually applies to personal property, but not to real property, if the real property is vacant land.
- With real property, the transfer of ownership is evidenced by a written document, usually a deed, and that document is usually called a Warranty Deed.
- The “Warranty” in the title means that the Seller is warranting (guaranteeing) that he owns the real property.
- But he is not guaranteeing that a sinkhole will not develop the next day. If there is a structure on the properly, the structure on the property can be sold “as is” provided this provision is stated in the written document evidences the transaction.
- “As is” has no single, universally accepted, legal definition. So if you are involved in such a transaction, add more information to the document describing exactly what you mean by the term.
- Regarding the buying and selling of a personal residence, some States have laws that prohibit disclaiming any warranty regarding the structure. There is an implied warranty of habitability.
- “As is” is not a defense against actual fraud, where the Seller intentionally misleads the Buyer, or knows that the Buyer has a misconception of significant importance and fails to correct the misinformation.
Taken from: The Language of the Deal – Real Estate Investing Vocabulary of Terms – Meanings and Explanations by Michael Lantrip
Welcome to 2021! Are You Ready to Generate Passive Income?
- Every new year is a time for reflection for me personally on my own real estate investing efforts ever since I began way back in 2014
- Six years later, did I reach my goal? Well, I’m currently at 924 doors – not my 1,000 goals I shot for at the end of 2020, but darn close. I’m hoping I can reach it soon. I would not recommend such an aggressive goal to anyone!
- What did I do that worked, didn’t work and what can I do better in 2021?
- Was real estate investing all I thought it would be?
- Well, not exactly but that was mostly my fault
- I thought it would be much more of a passive experience than it was
- I also started as an out-of-state investor
- Requires much more time and effort than I thought
- My first properties were inexpensive turn-key “C Class properties” and some were in questionable areas
- Because they were turn-key, I paid little attention – until, of course, it was a little too late
- Went through a number of property managers
- Did section 8
- Had trouble finding good tenants
- First, you must know what your goals are and how much time you are willing to put in to your real estate investing
- I wasn’t really clear on my goals, nor the time requirements
- I was willing to give it as much as it would take because I was “technically” retired and I’m very goal-oriented!
- I didn’t mind that. I like working. And I liked learning something new
- But then, as if having such a lofty goal wasn’t enough, I added a blog and podcast to the mix, thinking I would have plenty of time… lol
- I should have followed more of Tim Ferriss’ example in 4-Hour Work Week and start delegating early on but I didn’t
- Many people think that the kind of real estate investing I’m doing is passive. Well, that’s partly true — Yes, it’s “passive income” in that “income” generally comes in each month, like clockwork, without me doing anything directly (like you do in in a W2 job – trading time for money!) but generating that income has definitely not been a passive experience — at all
- Since I started full-time investing, I have been working full-time, pretty much like a full-time job. Now granted, much of that time is the podcast/blog, but there is still lots of time:
- Dealing with the management, contractors, other team members
- Researching markets
- Analyzing properties
- Making offers
- There’s been a lot of time and stress involved
- Before you start, you need to know what your risk tolerance is first and what kind of time you have available?
- I wasn’t aware of the risks associated with Class C properties
- I spent much more on rehabs, repairs, and maintenance and turn arounds than I expected. I had reserves but burned through them rather quickly
- I paid cash for my first properties and, because of that, I thought that since I don’t have a mortgage, that I won’t have that pressure. But, I shouldn’t have been so lax. As a result, I had longer vacancies, expensive turnarounds and the reality of me eventually doing cash-out re-fis to expand my portfolio brought mortgages back into the picture
- From there, you need to determine are you in it for cash flow or long-term generational wealth
What’s New for Me in 2021?
- Selling off smaller properties
- Optimizing existing properties
- Continuing to look for 100 plus apartment communities and to partner with other syndicators
- I will continue to build ground-up Senior Living facilities around the U.S. as well
- Do I have a new goal once I reach 1,000 units – like 2,000, 5,000 or 10,000? – not this year!
- Regarding the Old Dawg’s REI Network – We have some great guests and topics coming up for 2021. I also have some guest blog writers that are bring some great content in.
- In addition, I am doing something that I’m only going to mention now and will not be promoting. I am taking on a very few coaching clients. And I emphasize the term “very few.” I have set-up specific blocks of time during my week for this purpose. The only way I want to do this is by truly working one-on-one with people to help them to reach their goals. And don’t worry, I’m not going to be pitching this on the podcast. This will be the last time you will hear about this.
- Oh, and another thing, we are thinking and praying hard about leaving California. We only “technically” have one child still home (Kenny – my youngest) and he’ll be a senior next year and then off to college. He was really looking forward to the football season to start showcasing to college recruiters but there was no football season. He’s really sad about it but is getting involved with club and other options. California is getting more and more difficult to do live and do business… and I’m not even investing here!
- We’re thinking we’ll move closer to where our properties are (Indiana, Texas, Florida, Georgia, Tennessee, etc.) We’d like to get some land – acreage! A lot of my kids want to go with us too.
- Overall, I’m looking for a great 2021!
- I’m not sure what will be happening politically, economically and real estate-wise but, for whatever may happen, I’m moving forward with my plan and business and I’ll adapt and adjust as conditions dictate.
- For all of you listening – old dawg’s and young pups alike – I’m encouraging you to keep moving forward with your plans, too. Don’t be discouraged. Be wise. Plan well. And keep moving forward!
Well, that’s it for today!
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