What Fireworks Teaches Us About Real Estate Investing

Happy 4th of July! I want to take a moment to reflect on fireworks. Not the little ones, but the big fireworks we all love to watch. Isn't it fun to sit back and admire the explosions? To marvel at the bright lights and loud booms? To delight in the grand finale and wish for more when it's done? It's a great time for everyone. It's a 20 minute show that fills you with wonderment. 20 minutes. That's it. But of course, like most great things there's a ton of hard work leading up to...

Find The Wedge When Buying Rental Real Estate

Find The Wedge
In business school, a strategy professor of mine, Rob Wiltbank, shared the secret to successful acquisitions. He drew a line on the board and said, "This is a company's current value over time. When you buy it, this is what you're paying for." Then he drew another line above it (much like the picture above). "This is what you want the company's value to be after you buy it. See this gap? (As he runs his finger between the two lines) That's the wedge. This is where you add value to the com...

Responsible Tenants Are the Drummers of Rental Real Estate

Have you ever heard a music band that was just off? Sure, each musician was probably great, but for some reason it wasn't coming together? I experienced that once, but the reason was obvious: the drummer was missing. Because of this, the band sounded disjointed and off-beat. You could also see the concentration on their faces as they all strained to keep the beat. Nobody, include me, was enjoying themselves. When he finally showed up, they were in the middle of a song and kept playing. He...

My Disillusionment With The Stock Market

Stock Market Returns
I grew up in an interesting household. My dad owned and operated a construction business and my mom helped people plan and save for retirement. Whether on purpose or not they both instilled a couple of beliefs: Owning your own business is harder work than having a job, but the control and flexibility are worth it. Think way ahead into the future and plan for it. Here's an example: When I was 16, I was able to work for my dad because he owned the business and could decide to hire me....

Real Estate Investing Produces Gyroscopic Cash Flow

Most people start investing in real estate to earn "passive income". The idea is simple: buy a home, rent it out, collect checks in your mailbox each month. Boom! Passive income! That's one of the reasons I invested in real estate in the first place. However, this isn't completely true for the DIYer. Here's how my first month went as a landlord.... We bought a property that needed some serious TLC. Since we were just getting started, we couldn't afford to hire someone else to mak...