I am pleased to have a dynamite guest post from my friend and fellow real estate investor Scott Costello. Many people will be able to identify with his day to day struggles to build his real estate investing business while working the dreaded “J.O.B”.
Make no mistake about it, Scott is well on his way to escaping the 9 to 5 lifestyle he wants so badly to leave behind. He addresses the fears that plague all of us, and he highlights the importance of having a plan.
9 to 5 to Freedom
Having a stable, good paying job is something many people strive to find in corporate America. These types of jobs are safe and for the most part secure and provide a steady paycheck. I myself am firmly implanted in the 9 to 5 lifestyle coming in on 10 years now. It has served me well and continues to do so, but (there is always a “but” right?) I HATE IT!
I don’t know about you, but I always hear stories about people who have nothing and worked hard to make it in the real estate investing world. They risked their poor credit, the last $2000 in their bank accounts and quit their job as a waiter all to escape the barely surviving life they had. I applaud these people because they needed to overcome many barriers in order to succeed and that takes effort and fortitude and a never quit attitude.
I feel people in dire situations might actually have an easier time becoming an investor. If they fail they won’t fall very far. What about people like you and me though? We have “good” jobs making $80,000 + a year, own a home, have a family, some money in the bank and manage to have excellent credit. We have a lot to lose! Becoming a real estate investor requires all of us to take risks, but people like us stand to lose quite a bit.
If you are in a similar position to myself and are afraid of losing it all, don’t be! There are strategies and techniques you can use that will limit your risks. It may require a little up front money to get your marketing off the ground, but it will not set you back if you have any hiccups along the way.
Below I’ve list 3 fears that I have had during my quest for freedom. There are more, but these are the hardest ones I had to overcome. Along with the fear, I will explain how I am over coming them. Hope this helps some people.
Fear #1: Losing/Gaining the support of my family
The key to getting the support of your family is to show you mean business and the best way to do this is to treat your investing as a business and not a hobby. Educate yourself and be dedicated and this will go a long long way in gaining the support of your family.
I spent the first year just learning everything I could about real estate investing. I learned about wholesaling, rehabbing, subject2, probate, lending source, and much much more. My main source of information was from the forums over at ReiClub.com. I must have spent 2 hours a day on the site just reading.
To help show my wife that I am serious, I continually go to REIA meetings in my area. Spending my week nights putting together my marketing pieces and waking up at 4am Saturday mornings to put out bandit signs.
One key to all of this though is to make sure you leave time to spend with your family and friends. Don’t go so over board that they start to resent the fact that you are investing. Sometimes though, your spouse will not be totally on board until you bring home that first big check. Every situation is different, so just show you are serious.
Fear #2: Won’t have enough time with work, family, etc…
In reality, on most week nights after we get home from work and do everything that needs to be done, we probably have 2 solid hours of free time. These are your “Get-it-done” hours and you have to plan, plan, plan to make sure you don’t waste that time. In order to be successful you must only do things that will produce money. Here is a list of 20 activities that if done, WILL put you in position to make money. Anything else you do is just wasting time.
Building Buyers List
Driving For Dollars
Calling 4 Rent Signs
Door Knocking
Looking for FSBO on craigslist and other sites
Build list of Realtors
Make offers on bank owned, fixer uppers and handyman specials listed on the MLS
Get MLS access by building relationships with realtors
Going to Auctions and finding buyers
Networking with investors at REIA meetings
Build evictions list by going to courthouse
Build probate list by going to surrogates office
Build out of state owners list from tax records
Create a blog to attract sellers
Create a blog to attract buyers
Network with other investors on Facebook and Twitter
Look for private money lenders
Research your target area
Send out direct mail to Probate, eviction and out of state owners lists
Network with Real Estate Attorneys and Title Companies
Fear #3: Losing all my family’s savings
This could certainly happen, but only if you don’t educate yourself. You can make money investing with little of your own money at risk. The strategy I’ve taken which has the least risk but can help me build cash is wholesaling. In wholesaling, you make your money when you buy the property. This is true, because you’ve built your buyers list and know you can sell the house for a profit. That profit will then be reinvested into my investing business until I can build up enough cash to buy a rental property free and clear.
Sure there is some risk along the way, but if I plan properly and have bought the house right the risk will be mitigated. The only “Family Money” that you will be forced to use is the money needed for marketing (sending out mailers, buying bandit signs, etc…). Having limited time means you will have to leverage money to get sellers calling you.
In the beginning my wife and I had a talk about how much I can put into real estate investing and it wasn’t much, about $2500 a year. That gave me roughly $200 a month and I am using every penny of that on my marketing. The name of the game is getting motivated sellers to call you.
Plan For Your Future
The biggest tip I could ever give someone who is trying to leave their 9 to 5 J.O.B. (just over broke) lifestyle is to “make a plan.” Use a program like MindJet and map out your road to becoming a real estate investor. This plan will help you formulate your goals, give you direction and help to schedule what needs to be done each night after you get home from work.
Real Estate Investing is about momentum just as much as anything else. You need sellers calling you, buyers asking you for properties, closing to occur so you can pump more money into your business. Without one of these things you will fail. Just think about how easy it is to push a car once you’ve got it moving, but how hard it is to get moving. Same thing applies with investing. One of my biggest struggles with working a 9 to 5 job and trying to become a full time investor is keeping that car rolling, but it is a must.
