 What if you did one thing well?
With life today, opportunities seems to pop up everyday. Especially on social media. Stocks, bitcoin, drop shipping businesses, real estate, side hustles. It’s hard to focus on one thing because when the market takes a huge dump and I see stocks drop a huge amount in like "this is the time to get in I could make thousands I will just have to do a little research and some money". Or a side business opportunity comes up and I think of diverting my attention there. The people that I know are successful a few things well and are strict about what they do. The CEO of the How Group: Gary Jonas does builds 50 unit buildings mostly in Philadelphia. He has plenty of opportunities brought to him all the time for other projects but the how group is an expert in that. Which is why they have 750+ units today and are growing! One multifamily investors I have tried to find deals for had a strict criteria and whenever I brought something outside the criteria would just say it’s not in my criteria I’m not going to entertain it. He has 70+ units and manages them well! To the outside it seems short sighted. Why don’t you try new things, are you afraid to expand leave your comfort zone? But to the person on the inside they are clear on their goals and their vision to get there. For me the goal is a clear number of passive income and the vehicle is real estate. However real estate is a large field: commercial, Airbnb, wholesaling, flipping, etc.... should I do the construction myself it saves me money but it dilutes my focus and weakens my visions, drive, and opportunities elsewhere. I decided to focus on long term buy and hold rentals this could be single family or multi-family investments but the premise is the same. I am not doing flipping, wholesaling, etc... I am buy properties I can see myself owning for the rest of my life and pursuing the BRRR strategy next to help add these assets. Buying properties and the BRRR strategy are all driving towards my goal of my monthly passive income number. Not to say the other avenues are not great but they are not for what I am trying to achieve. Losing Focus: My fiancé and I recently renovated my kitchen and bathroom and thought We would do that on a few more houses. We quickly realized while the outcome of the project is awesome It cost us way too much in time. We could have paid a tiler 500$ what took us a week to do. What if we had spent that time networking with people in the multifamily industry about how to scale? I would say that’s worth more than $500. It’s easy to feel the need to do everything but you have to ask yourself the question do I want to be a great tiler or do I want to be great at real estate? So we will be hiring out tile from now on! I will still do little things like painting and landscaping because I know what I'm doing. But the hard stuff that takes a ton of research I am hiring out. Block out the need to do everything DEY Mentality - Do Everything Yourself and do one thing well! Getting Focused In addition to this I use the Bigger Pockets 90 day Intention Journal to help me stay clear on my goals. This has been a game changer for me! As someone who is scattered and has 100 things going on a day using this is key. You write down your three big goals for the quarter everyday, what you are thankful for, and your schedule. I highly recommend using a planner everyday. Another great resource is the book the One Thing by Jay Papasan. This book puts into perspective what is the one thing we need to do each day to get us closer to our goal? The Breakdown: Have a clear goal for me : Have X amount of passive income monthly. The How: I will use long term buy and hold rentals to get there. What are my next steps: I need to network with individuals who have accomplished what I want and ask how I can reach that goal. What is the fastest path?
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 We have all heard of DIY do it yourself but slowly DIY can turn into DEY..... Do EVERYTHING yourself. Jake and Gino the Multi-family Investors call this the Ima mentality or ima do it myself.
This article will be talking about how we slowly take on more and more and resist handing off the lower $/hr tasks as we scale. I write this as someone who has spent many nights the last few weeks tiling his own bathroom and drywalling this week. When I was buying my first house I met this inspector. He was telling me he used to build houses and he even designed several of them himself. In my head "you were a developer why are you here"? I asked "so why aren't you still building homes". His reply: "I felt like I had to do everything in my business - I managed my guys, ordered the supplies, and did even the payroll myself". Hearing him say that really stuck with me and scared me. That stuck with me for some reason maybe because I always grew up with this mentality of if you can do it than you SHOULD do it. Whether it's about saving money or just a pride thing. You can get away with everything for awhile: doing the accounting, doing all of the work yourself, doing your job, trying to educate yourself etc... At a point things the hats you are wearing start to thin out because you're tired from doing everything and you start to weaken in those roles. Some peaks and valleys I have hit: Running my landscaping company out of college - it was a new company but I was working from 5am - 10pm everyday and extremely tired. For many reasons I decided to give it up. Part of which was having time to educate myself. I took a corporate job and everyday I spent 5-8 hrs listening to real estate podcasts and reading books when I had free time and hit my goal of being full time in real estate (this took 2.5 years not overnight)! My partner ended up going into sales and killing it. We make calls and drive around now, not moving thousand of pounds of dirt everyday much better! Feeling like I needed to learn and do everything on my properties - I had a dryer break so I went on YouTube spent a few hours learning to fix it. I went to Home Depot bought supplies. Spent 2 hours trying to fix it . I eventually couldn't figure it out and had to call someone to fix it which he did in 20 minutes and charged me $250. I wasted so much of my time on a task I do not want to be good at. It was a huge learning experience and after that I call people when I need mechanical things fixed or even if it's something I know I haven't fixed before. Be clear with what you want to be! I want to be a successful real estate investor, not a dryer mechanic or an accountant (which is why I pay an accountant). I did a few large projects this year my kitchen and bathroom and have learned quickly what I do not want to do again. I found myself pulling late nights tiling my kitchen and bathroom with my Fiancé ourselves. I could have done the easy work of putting the mason board down and just called someone to do the tile (which took me days). But I had done tiling before and knew enough to get myself into trouble. Business is a lot of learning what you shouldn't be doing and delegating that out or as my boss Jesse would say "delegate and elevate". It is a scary thing because your first thing you think is "I don't have the money to delegate". But when you do delegate it out you use that time more effectively and usually end up making more money at your job or on an investment. What 15-20$ / hr tasks are you doing that you could delegate in your business? What do you hate doing in your business that you feel you have to do? What is something you would like to do more like reading or network but you don't have the time because tasks you should probably not be doing get in the way? What are you going to do to elevate your business?  Disclaimer: I am not a lawyer or city official. Know your cities laws for rentals and Fair Housing Laws. Every county is different so know your own laws!
So you are renting your own property out! You probably have some questions: Where do I find tenants? How do I screen tenants? Do I pay to screen them? How far in advance should I list my rental? All these questions and more will be answered! It is important to avoid certain pitfalls when renting your property out and this will cover those as well. I list my rental myself, professionally lease for landlords, and the company I work for as well on their 50 unit buildings. First things first you should have a rental license (at least in Philadelphia) if you are renting your property out. Check your local requirements! The Process - The company I work for and I list our rentals 2 months in advance. If the property is going to be vacant in June list it in April and start getting tours in. Between screening and showings it usually takes 2 months to get a good tenant in. Where to list: When I list my own rental I list on Facebook Marketplace, Zillow (still free in Pennsylvania), and Craigslist. Zillow started charging however not for PA. Zillow also will out put your property on to Hotpads and Trulia. Advertising Your Property: So I'm sure most people do not set out to discriminate but I have seen a lot of Facebook rental postings say : "looking for a young professional to move in". There should be no mention of what type of person you are looking for. It should be solely off the application. I will get back to this later. In Philadelphia all of these categories are illegal to discriminate against: (The Following was taken from The City of Philadelphia Website: ) In Philadelphia, it is illegal for landlords to discriminate against tenants because of their:
So You Have Leads Now What? You have 50 leads in your inbox now what? What I would do is call down the list and set a 1 hour slot for everyone to come, but give them a specific time do not call it an open house. When people have an appointment for 3pm they are more likely to show up. For example: Me: Hi Jim I have a tour slot left to see the rental this Thursday at 3pm? Jim: I can't make that is there any other time? Me: No sorry I'm booked up the rest of the week. Jim: Ok I'll make it work. People are flakey so keeping your tours to one hr a week will save you a ton of time. What it also does is when a ton (10) people show up to a property at once it creates a sense of urgency and people want what people want so it rents quicker. When touring people avoid this! People will ask you what are the demographics of the area? Or are there a lot of families around here? Are there a lot of young people in this area? Is this a safe area? You cannot answer these questions. Just say I legally cannot speak to the demographics or safety but you are free to look up the crime statistics! Also do not steer people! Steering is pushing people to other areas based on race, religion, or other characteristics. Ie: I have a rental in this part of town you might like better because you're older and it's quieter there. Congrats the open house "appointments" went well you have people who want to apply! So what's your application process? Here is mine - I have a paper application that everyone over the age of 18 will fill out and put your job and salary info. I will need paystubs as well. In addition to that I will send a link for the credit and background check through TransUnion SmartMove it will be $40.00 per application over 18. One of my colleagues uses this criteria to screen and I use it now as well: Qualification Standards: - Gross income must be 3.0x monthly rent or more. Income verified. - Reliable rental history w/ current and previous landlord contact information provided, if applicable - 580+ credit score - No collections, foreclosure or bankruptcy in the past 3 years. - No history of violent crimes, felonies or any crime relating to minors. It is so important to have a set screening criteria before you start the process. If you lower your standards throughout the process you have to go back and notify everyone. This could open you up to discrimination issues if you told someone one set of criteria and someone else something different. Be clear and no your standards! Now you found somebody you like! I require one months rent as a security deposit, and first months rent upfront (this is negotiable). I will not take the unit off the market until the security deposit is received. For everything of how to operate as a landlord ie: collection rent, book keeping, leases and other docs check out: The Automated Landlord Article Other Scenarios: Pets: If you choose to rent to people with pets you will have a pool of people that can't go to other places and this will give you an advantage. Plus you can charge a $25-50 pet rent and a 300-500$ non refundable pet fee. Check with your insurance company on what pets they allow and breeds when it comes to dogs. I do not allow pets but someone has a helping dog that's a Pitbull mix and my insurance company doesn't allow Pitbulls. I'm not an insurance agent and this is not a plug but State Farm has no breed restrictions. I do not use them but if I were in this scenario I would go there. Philadelphia and Surrounding Areas Listen Up! If you are renting to a family with children and your home was built prior to 1978 you need to know this... The following was taken from the City Of Philadelphia Website: Philadelphia Lead Paint Disclosure and Certification Law
 The financial freedom train is all about getting to financial freedom. This is just one way to do it but I think the over arching path is how most people get there. I best heard financial freedom explained by Thach Nguyen as: "What age do you want to have the option to work in life?" You may be doing this because you hate your job and want to get out. You may also love your job but goals change and down the road you may want to travel 2 months out of the year, be a stay at home dad/mom, or want stability if there was a job loss. I think the best part of financial freedom is the piece of mind that comes from knowing you are financial stable enough to weather a job loss, large unexpected expense, going on more vacations, and the opportunity to spend more time with family!
The Financial Freedom Train! Step 1: The Roadmap Where are we going and how are we going to get there? In my financial freedom model I choose real estate as a vehicle to build my wealth but that is just one way. You can choose a less active path such as mutual funds and other means. I choose real estate because I think it is the quickest/largest net worth builder and I do not mind the work that comes with it. How much money do you need? What if you find you want 10,000 in passive income a month? Let's build this out using rentals from my area: House rents for 2000. So if this rental was paid off it would cashflow 2000 - 266(taxes) and 100 (insurance) = 1634. $10,000/1634 = 6.11 So we need 6 or 7 paid off rentals to get to that goal. So we buy our 6 or 7 rentals that cashflow atleast 400/mo * 6 = 2400/mo. We dump that 2400/mo into one house + if we want to add more until it's paid off then we unlock that 1634 of more cashflow and start paying off the next rental. It's like dominoes with cashflow at the end. 2. Budgeting and Saving It's not what you earn it's what you keep!!! There are a lot of people out there making 80-100k but they rack up debt quickly. It is key to keep your expense low throughout your journey. What sounds better the oppurtunity to vacation for a few months one day or a car payment today. I wrote a post on how to save huge amounts of money www.callphillyhome.com/home-buyer-education/saving-money-in-your-20s-and-30s this will tell you everything you need to know! 3. Increasing Your Income This can be a difficult one and you may have to be creative. I was at a corporate job that I hated and increasing your corporate salary could take years. Should I get my MBA, spend 2 years of my nights and weekends + 50000 with interest so I can earn 10,000 more once I'm done? That didn't make sense to me. I had been interested in real estate for years and a few peers even at my corporate job said I should get my license so I did. I worked from 3 months spent 500-700$ and got my real estate license. I began working nights and weekends besides my w2 job which was 10-12 hr days. The days were long but my real estate job gave me life again. I began earning more money that I could save up for my third real estate deal. I ended up quitting my W2 job to pursue real estate full time. Which I could only do because I was saving up for a 3rd real estate deal which now became my cushion until I could replace my income. So side effects of pursuing financial freedom I'm now doing a job I am passionate about and had the money to jump ship because I was saving for my 3rd real estate deal. Changing jobs was the biggest shift for me. I went from working 10 hr days in something I didn't like + 1.5 hr commute to working where I wanted, in a great company that feels like a family, doing what I love everyday. Once you increase your income make sure to keep your expense low! You maybe able to take your foot off the gas with the little stuff but do not go out and buy something big now that you have done the work. 4. Putting Money on the Train! So you have made your road map, you saved, you boosted your income and kept your expense low! Now after months of saving a consistent amount of money you have a lot of money in your savings account. When I get to this point I invest the money in real estate. Real estate is great for me because it is not liquid aka I cannot take my money quick if I want to buy something I probably do not need. The way I think of it is taking my saving putting it on the financial freedom train (real estate deal) that will appreciate, cashflow, and depreciate my taxes. When you have a lot of money in your savings not in a deal or mutual fund you start thinking of things you could buy. They may be practical too like : I should buy a truck for 25k I do a lot of work on my homes this would help. But that money could be in a real estate deal helping you take back your freedom and you can get the supplies delivered from Home Depot for a low fee. These are basically the four steps you will be told if you read any of the books out there. The goal is buying back your freedom and security. If you don't like your job this could give you the freedom to pursue that side business you have been working on or spend more time with your family. It is not an easy journey but it is very possible so why not try?  Do you ever wonder about what has changed about houses over the last few years? What are the new cutting edge things happening with new construction? When I started working with new construction I was amazed at some of the new features! If you work in the industry some of this will be things you have already seen for awhile but many have not. Here is your inside look at the what's new with new construction! First we will start with taking a look at Philadelphia's newest home: The Ironworks! The Ironworks In Northern LibertiesClick play above to see The Ironworks Slideshow! The Ironworks is Northern Liberties newest home! With studio, 1 bedrooms, and 2 bedrooms. So what is new with the newest home in Philly?
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AuthorMatt Tallent is a Realtor with The How Group. His passions include rental property investing and helping others achieve their real estate goals. Archives
October 2020
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Financial Independence
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