You'll get a kick out of this...for a couple of reasons. You'll realize what a bonehead one of my students is and, unfortunately, you may realize that you're being the same way after you've had a good laugh at the ridiculousness.
So...one of my oldest students (not by age, mind you) brags that he's been following me since 2002/2003-ish. So...do the math. That's about 20 years. I think he's one of my "oldest" students still around (although that will probably change after he reads this email).
Yet he doesn't own his own apartment building. He manages one, though. It's 66 units to be exact. And he boasts the fact that he's single-handedly brought it up from a 29% occupancy to full.
Good job. Glad you are making someone else rich while doing all the slave work for your boss. I'm sure he's proud.
But...because he's used to "managing" (not "owning," remember) a 66 unit, it's beneath him to own any building below that amount of units. He wants something bigger, he exclaims. None of this "smaller" building nonsense that I've been teaching my students will do under any circumstances.
It's almost like working for Microsoft as an employee, wanting to start your own business but your new business has to be a Fortune 500 right off the bat or...well, you just won't do it at all.
How stupid is that mentality?!
Yet, as history seems to be unraveling for this student, it seems that wanting to own something bigger is the only obstacle for him not owning anything at all!
By the way, do you want to know the fastest way to piss me off? Introduce yourself to me at any of my seminar events like this, "I've been a student of yours for 20 years but I haven't done shit with any of your information yet."
Trust me when I say that more than a healthy handful of my students have done this and every time it's like listening to nails on a chalkboard through a double bullhorn.
For those of you who have been following me for that long -- or even the past year -- you'll know that I personally have DRASTICALLY altered my PERSONAL investing methodology and strategy to exclusively focus on smaller buildings for the following reasons:
1) No competition with the bigger investors.
2) Properties are "mom and pop" owned allowing for all kinds of creative financing, lowered asking price, land trusts/contracts, etc.
3) Cash flows, by "volume" are actually HIGHER than in a larger building; this is due to the LOWER operating costs by percentage against the gross operating income (gross rental receipts). By "collecting" a bunch of little properties, you can see your overall operating expenses stay a steady low 40% to 45% instead of paying 65% of your gross income out in expenses (as you do with larger buildings).
4) Qualification for smaller buildings is a CINCH, especially if you are a new investor with no management resume, no portfolio of buildings, no experience, and no assets to support a multi-million-dollar loan/mortgage as with what is NOW REQUIRED for you to acquire large multi-million-dollar acquisitions. Banks/lenders do not expect to see any of the above with a small building, as you are a new investor and everyone has to start somewhere.
5) A bank will put up with a lower personal FICO score and/or minor credit deficiencies when the loan risk isn't that high.
Yes, you can invest in larger buildings...as time moves on and as you put together your initial portfolio. But the biggest MISCONCEPTION there seems to be out there is that you need a 100+ unit building to retire.
And you don't. Far from it.
In fact, in my last seminar event, I did a presentation showing how any one of my students could get 3 buildings (all less than $500,000) which would result in a cash flow of $14,000 a month...IN YOUR POCKET. And they weren't large buildings. Each one was very small.
If you can't retire on $14,000 then we need to talk. Even MY personal monthly expenses are below $8,000 a month and I own home worth well over a million bucks and drive 2 luxury cars. So, if $14,000 a month can't work for you then...you're delusional, don't know how to use a calculator, or you're a drug addict. Or a porn/sex addict. Or just a dummy.
So...I guess I lost a student because he's going to still be sitting around, hard-headed as hell, and waiting for another 20 years to buy a building that's "at least" 66 units because, after all, he's been making someone else rich all these years by managing a building this size. And it would be "beneath" him to own something smaller than that REGARDLESS of how kick-ass it cash flows.
You know...like Forrest Gump says..."Stupid is as stupid does."
Hopefully you're not stupid like this, waiting around for no reason.
Now, part of the problem with this student (and many others) is credit and accessing unsecured cash for deals. And the other part is that we're in an overpriced inventory-tight market.
But I have a SOLUTION for BOTH of those things. CLICK HERE and join me for a complimentary real estate training. This is a RARE training because, as you know, I just don't do real estate trainings anymore.
I strongly suggest you register for this one because it's ULTRA IMPORTANT. Click here to register now.
See you at the top!
P.S. I'm looking for sales reps to make money part time from home selling some of my high-ticket programs. We book the calls, you take the calls, you close the sales...and you make a commission for each sale. Pretty sweet deal, don't you think? CLICK HERE to get in on this opportunity because I only have a few more phone rep slots left...and that's it! Once their gone, they're gone! CLICK HERE NOW!