Go to school, study hard, get a good job. That’s the linear path that a lot of people start on. After getting an engineering degree, Lane Kawaoka started working in the day job as a construction supervisor and bought a house pretty quickly. But he was never home because he was traveling all the time for work, so he started renting his home out. Realizing how much passive cash flow he was able to pull from that got him started into real estate investing as a working professional. He currently has a portfolio of eleven single-family homes in places like Seattle, Birmingham, Atlanta, Indianapolis, and Pennsylvania. He’s also a partner in a syndication that controls currently over 1,300 apartment and RV units. Lane has made it a mission to help people get off the corrupt Wall Street roller coaster and focus on main street investments with safer, higher returns that benefit the American middle class.
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As a busy professional, it’s unlikely that you have hours to spend sifting through markets and properties and looking for that so-called “best deal” or even your next deal. Being time poor, which probably describes most of us, shouldn’t prevent you from growing and multiplying your hard-earned money. You don’t have to do it yourself. If you’re a busy professional or you’re just thinking about investing but don’t have the time, then you need the right team and you need the right mindset and you need the right guidance. Let’s talk about that with my next guest.
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Investing As A Working Professional with Lane Kawaoka
It’s my pleasure to bring on Lane Kawaoka to the show. Lane is a full-time civil engineer and a real estate investor from Honolulu, Hawaii. He has a portfolio of eleven single-family homes in places like Seattle, Birmingham, Atlanta, Indianapolis and Pennsylvania. He’s also a partner in a syndication that controls currently over 1,300 apartment and RV units. After Lane’s parents got duped with their 401(k) in the stock market, he’s made it a mission to help people get off the corrupt Wall Street roller coaster and focus on main street investments with safer higher returns that benefit the American middleclass. Lane, welcome to the show.
Thanks for having me.
It’s great having you on. You and I seemed to have very similar investment philosophies and I love the work that you’re doing and the articles that you write. I thought it was a good time to get you on the show and pick your brain a little bit about what you’ve done and how you’ve progressed as a real estate investor, especially from the state of Hawaii. You’re investing literally thousands of miles away. Let’s start the show off by learning about you. Tell us about your background and how you’ve got started investing in real estate.
I started on this linear path that a lot of people start on. They’re told to go to school, study hard, get a good job. I went to college to get an engineering degree. I graduated and I started working in the day job as a construction supervisor and went headfirst into that. I didn’t know anything else. I saved my money to buy a primary residence to live in because that’s what everybody told us to do. I bought a house and because I was traveling around and pretty frugal with my money, I was never home because I was traveling all the time for work, which a lot of times, when you’re in that new job, you’re the guy that travels all the time.
I started renting it out and the rent is for $2,200 a month and the mortgage is $1,600 a month. I was 22, 23 at the time. That was a lot of beer money and I was like, “I’ve got to do this again and again and again.” I didn’t know anything about in Seattle. That was A-class building and I didn’t know anything about cashflow or this 1% rule or rent evaluations or whatever. That got me motivated to save money because I had a reason to save and I knew what to do after that with it, that it wasn’t going to be the stock market.
Did you venture out into buying stocks, bonds, mutual funds and other things as well when you led down that path?
I had. When I was fourteen or fifteen, I had a first job picking pineapples in the fields of Maui. I had a Roth account from that because you’ve got to make money to be able to have Roth account. I started doing that pretty early. I was into all the travel hacking and all those credit cards and did all that kind of stuff. They traded for a year prior to my senior year of college and I realized what a scam that was, how stressful that was. I don’t proclaim to be an expert in that stuff, but it wasn’t for me and doesn’t seem like it’s a sustainable way of building wealth.
What happened with your parents? You talked about your parents getting duped with their 401(k) in the stock market. Was there some catastrophic event there or were they just underperforming the whole way and they could have done better knowing what you know today?
I was having dinner with my parents and they’re always talking about their 401(k). They don’t even know that they got screwed investing in that stuff. Here they are very highly educated, that the very least is a master’s degree, yet they’re still working and they have very average means in terms of house and what their net worth is.
They’re following a similar path of what most people are taught through friends, family, and in the Wall Street financial institutions. We’ve heard it multiple times, go to school, get good grades, get a good job, save your money, invest in 401(k)s and IRAs and basically put your money in the hands of Wall Street. That’s effectively what they’ve done.
Granted, they got there. The saving grace for a lot of people is that their parents got there. They got to retirement, who knows if they’re going to have enough. Through being very frugal, sometimes even very cheap, they got to their retirement. What they don’t realize is they can get there probably five to ten years even with an average paying job. The proof is in the numbers. A lot of these turnkey single-family homes, you buy it. You can make 20%, 30% return on your investment. What I tell these guys is, “Why the heck are you only getting 8% to 10%? I don’t know 10% anymore in the stock market but 8%, that’s like a delta of 20% something. Where did that go?” It went through all special interest groups. It went to all the Wall Street insiders and the middlemen to mark that stuff up.
A lot of people are on that path or fall into that path and they don’t know any different. It’s people like yourself, myself and there’s a long list of other people that want to help and guide people to show them other options, other assets. A lot of people call alternate investments or alternate asset classes. In my world, the real estate is the primary asset people should be investing in. All these paper assets, to me are the alternative investment class. I have it flipped around. We need to keep putting content out there and educating people and exposing them to other ways of investing in other truths. Now you’re a working professional and most working professionals make a decent income usually above average. I know you’re a big advocate of investing passively. Let’s talk about working as a professional. How does a working professional or any busy person build a portfolio with little or limited time?
The first thing you’ve got to take a look at is what kind of resources you have at your disposal. The three big ones to look at is, first, time. Do you have a lot of time to do this? You don’t need very much time, maybe a few hours a week to focus in the right direction or just find the right people to work with. The next is knowledge/network, which when you start off, you don’t have much of that but it will get there. You just have to understand your place. The last is money. You don’t need very much money to buy a single-family home. Maybe $20,000, $30,000 to get started and have enough money in cash reserves in case something happens.
For a lot of people who are in debt, I tell them, “I’m sorry I’m not a magician. You’ve got to save some money. You can’t just spend money in the things that you can’t afford.” A lot of hardworking professionals making $60,000 to $90,000 a year, it’s just a matter of focusing on not spending your money on things because you know where it’s going to go into. It’s going to go into rental property, say every year or every two years or three years. When you get that focus, that’s when things really started to happen.
For someone making $100,000 a year or family making $100,000 a year, if they can pay themselves first and off the top and put $10,000 or $20,000 aside, which is 10% to 20%, that may sound like a stretch and something that’s very hard to do, but it’s the whole thing of deferred gratification. You give up having all the bells and whistles and toys and doodads today for a better life tomorrow. If you can put that 10% to 20% aside today and save up that down payment and get into that first rental or that next rental property, then you’re starting to build that momentum and you’ve got an asset and you just keep doing that.
As the years go by, you start to build a portfolio. That may sound like a slow way to go, but if you’re limited by cash, you can only do two things. You can cut your expenses, which is a hard thing to do, or you increase your income. That’s something that people can focus on, whether it’s taking on a second job, getting raised, building a small sideline business, but as you said it, you need time, knowledge, your network of people and cash. For a lot of people, the limiting factor is the amount of cash that they have. The more you can accumulate and the faster you can do it, the more rental properties you can invest in or investments that you can get into. Do you think that’s a fair assessment?
The big part of that is the big picture. Let’s not focus on buying that first rental. Let’s see how this is going to play out. If you’re able to save $20,000 a year after any of your income minus expenses, then you can probably buy rental property every year. Maybe every fifteen months to be more conservative. You lay it out on a timeline and say, “This year, we’re going to buy one,” and next couple of years you’ll buy another and then the next year you’ll buy another. Soon, you’ll have five to ten and now you’ll be buying two a year. What your goal is maybe like $5,000 to $10,000 passive. You’ll get there in the next decade or two. You’ve probably stop working before then.
We can’t exclude other working professionals as well that do have a high income and have a lot in savings. They have a lot in reserve because we do talk to investors, clients that we work with that literally have hundreds of thousands of dollars, if not seven figures plus of investible capital. They have the cash, they have the credit, they just don’t have all the knowledge that they would like. They have enough to get going. The biggest factor, and this is true for virtually everybody, especially higher income professionals, is they don’t have the time. They’re very busy working in their careers, on their practice, dealing with their families, friends, if they have time for hobbies.
Time seems to be the biggest factor that people struggle with in terms of getting into real estate. They have to realize that you don’t necessarily need a lot of time with some of the options that are out there, that you and I both are well aware of. For example, turnkey real estate investing and syndications, even note investing. Time, for many people, is the biggest constraint followed by cash. I don’t know if that’s true for you too but that’s at least what I see.
I see that probably the biggest mistake of passive or high net worth or even low net worth working professionals is that they think of real estate investing as flipping houses. I don’t know why anybody got that in their head. Maybe because they watch too much TV. That’s trading, that’s a job, and for a lot of professionals, you make more money at your job than these guys flipping houses at the end of the day after I tear apart their spreadsheet and after the government takes half of it.
Flipping seems sexy and glamorous because of TV, but at the end of the day, you’re a trader and it’s a high-risk way to go. It’s very active, not passive. There’s a lot of risk, a lot of work, a lot of time. I’ve done my fair share of it. I still do some today but believe me, it is not my favorite thing to do. There’s a lot of brain damage for those thinking that buying a distressed or ugly house, fixing it up. It’s fun to see a house go from ugly to pretty but there’s a lot of work that goes into that. Not my favorite thing.
A lot of people have money just lying around. They don’t realize they have it and it probably takes a five, ten-minute conversation to get that out of people. A lot of times, they’re saying, “We don’t get a lot of money.” I’m like, “You’ve got that self-directed IRA. You’ve got 401(k) money that you left that job. It’s out there.” It’s funny a lot of these working professionals, they’re the guys who maxed out their 401(k) and they don’t have any money.
Do you have any comments or suggestions for putting one’s money to work most effectively?
It’s more about just getting started. The turnkey rental is probably the quintessential prerequisite to everything. It’s a small capital overlay for what? Putting too much skin in the game. It’s a freaking turnkey rental, it’s not that hard. A lot of the big components are fixed for you and it’s in a good secondary market, usually a number of bust economy, which are the two big things. You’re often going, you’re learning how to be managing the manager, which is how you want. You don’t want to be a landlord, you want to be more of an investor. It’s remote a lot of times too. If you live in places like Hawaii or California or Seattle, you are forced to manage it the right way. You’re getting a lot of that remote experience and the hands-off experience, which is very important if you want to get more than three rentals.
I like to say that if done right with the right team, it is by far the best way to have exclusive ownership of the hard asset, the actual real estate. There is no better way to go about it. This is why working with the right people, the right companies, with the right team guiding you appropriately, is the best way to go about it. That way you can build that portfolio of hard assets, income producing assets. I agree with you.
I talked to a lot of very high net worth individuals like doctors, lawyers and they’ve got a huge chunk of money. They’re always thinking, “I’m going to get a multifamily because I hear you didn’t want multifamily.” I’m like, “If you want to put in $300,000, $500,000 of your own money into one deal that you don’t even know what you’re doing, you can go ahead and do that.” What I usually recommend is just take $30,000 and go buy a single-family home with that. See if you like doing this and make a mistake here and there with that money and then figure out what you’re going to do to go bigger later.
You can take that same path and avoid making those mistakes because you’re following the path of other people who’ve done it before. They can guide you along and make sure that everything works out properly, smoothly and your due diligence is done accordingly. That’s exactly what we do in our companies. We make sure that people are on the right path, buying the right things, the right properties in the right neighborhoods with the right team in place and they’re cashflow positive from day one. I assume you don’t manage your own properties. You are a remote manager, in other words, you’re managing your managers with the properties you have in those five, six states?
Right, always professional property management.
Do you have any tip or advice in terms of managing your manager? Everyone has a different opinion.
I think using the Pareto’s Law you’ve got to be more of an involved investor from a far. You’ve got to have a bee farm on your emails, keep people accountable. If you’re going to have an eviction on the sixth, you better be joining on the spot and send them an email or texts or phone call on the eighth, following up on it. If they know you don’t know what you’re doing and you’re one of those lazy landlords, that’s the service you’re going to get. That’s probably why you hear different responses or different reviews on the same property management company.
You’re talking about the manager, not you in terms of managing your manager. How often do you communicate with your property managers or the management company?
Not very often. The joke is you only talk to them when there’s something wrong.
I rarely talk to my managers and I’m glad. I don’t want to be talking to them. I want to get a statement every month and ACH deposit into my bank accounts every month and leave it at that. Every once in a while, there’s a minor repair or something but that’s part of the course, that’s to be expected. We’re dealing with things that have some wear and tear and we’re dealing with humans. People have issues and so things come up.
When I had eleven of these things, I’ve got to a point of scale where I’ve got the ebb and flow of how these things work. I would have an eviction from time to time, but it’s not very often. A big repair might happen four times a year with that many properties. It’s no big thing because there was a leak, tell me what you’re going to do now, I’m going to check up if you did that, when you said you’re going to do that. It’s no different than corporate America. A lot of us have jobs where we’re not even near a bus or downline. It’s like, “How does that work?” It’s the same thing, it’s just a lot simpler in this case and luckily you can fire them too.
That happens from time to time, fortunately not that often, but it does happen. We all like to learn from other successful people who are building wealth for themselves. You and I are both fortunate to be able to speak to many others who were doing well for themselves. What takeaways have you learned from other successful or sophisticated investors? We all learn from others. What are your biggest takeaways?
One thing is not thinking that you’ve got it the right way. Always have an open mind. I come across all kinds of people. I don’t know what will make you successful, but I know for sure what certain things don’t. Some people, they always ask for advice and I always tell people you need to lead with value first. One of the biggest ways that I propelled my investing was getting to know other investors in an area that I was investing in so that the guy would text me, “I’m changing property manager because this guy sucks.” Those kinds of relationships don’t start unless you make the first effort to evaluate them. It could be something as simple as sending them a Starbucks gift card or eCard or something that you show appreciation. Too many people just are askholes, is what I call them. They ask too many questions and they’re like, “All right, see you. Thanks.” How do you expect better relationships that way? That’s just not how it works. That creates their investing as a lone wolf and nobody’s out looking for them.
You reminded me of one thing that I’ve done on and off in the past. Randomly, I do this maybe once or twice a year. I pick a day and I’d order Chinese food for the entire office and I’d have it delivered early so people are there and it comes as a nice surprise that they’re like, “Someone bought us lunch for the whole office coming from Marco.” It keeps you on their mind and it gives them a feeling of, our client cares for us. It’s not the other way around. It’s not meant to be a bribe or anything like that, it’s just a nice gesture to say, I appreciate all the work you’re doing and you helping me and I would like to stay top of mind with you guys. Just a little thing that I’ve learned from someone else who has been very successful. You learn these things from different people.
These things are very simple, but nobody does. You can try and do it, just write it down and try and do something like this once a year, twice a year. You’ll just rise up to the top.
In regard to takeaways, was there any big lesson or a-ha moment you’ve got from people that you’ve been talking to, other real estate investors?
One thing was peer groups. When I first got to starting investing, I would go out to all these local radios, which are a complete waste of time if you’re an out of state investor in a primary market. Everybody says go to them but I preach today that those are a waste of time because they’re peer group and they’re just a bunch of people fixing houses and a lot of older people who bought rental properties where the rent evaluations don’t make sense and you ask them how many you have and they have two. I’m like, “You’ve been doing this for 40 years and you’ve got two rental properties.” My real estate investing started to take off when I started to travel to different conferences. They had to get their butt on the plane and actually fly somewhere and met much higher investor levels. They’re doing it for maybe five, ten years and they had a few properties and I think trying to progress to those higher-level events and groups is what everybody should be trying to do.
There are real estate investment groups in virtually every city all around the country. I’m not going to discount them. Ten years ago, I was going to many of them frequently from San Diego all the way up to Los Angeles. There were three or four big ones and I was attending them every month and then as time went on I found that they were less valuable to me and have less interest and probably the biggest reason is because a lot of the people that go there, they’re looking for local deals. Being in Southern California, I wasn’t interested in local deals because it was really hard to find local deals. For the most part, a lot of the people who attend these real estate investment groups are rehabbers, flippers, hard money lenders, people looking for distressed properties and wholesalers.
That wasn’t my cup of tea. I wasn’t looking to buy distressed property to fix and flip here in Southern California. It was something I looked at for a short period of time, but I forgone it and moved on. I’m not trying to discourage anybody from going. You can meet some good and interesting people and learn from others but at the end of the day, if you’re a busy professional as we’re talking about here and you’re looking to invest in a market that makes sense and that’s not your backyard, you’re probably not going to get a lot of value from a local REI, real estate investors club.
You hit it right on the head there. Try and find people that you are pedigree. If you’re an engineer making $70,000 a year, go find somebody who was an engineer five, ten years ago who is making $70,000 and see what they did. If you’re a doctor, go find another doctor who is investing. Try to find somebody who was what you were and who is where you wanted to be and buy them first a lunch.
That’s a great way to pick someone’s brain and learn from them. Just buy them lunch they need to eat. You might as well just see if you can get an hour with them. Let me ask you about IRAs, self-directed IRAs. Americans today hold approximately $8.6 trillion in IRAs and it’s estimated that only about 3% of that or about $250 billion of it is expected to increase. That $250 billion is the part that’s self-directed. The rest of it is trapped in an IRA. There’s about $260 billion in self-directed IRAs and that’s just a drop in the bucket.
Every day for the next fifteen years or so, roughly 10,000 baby boomers are going to be retiring and these baby boomers are going to be looking to roll over their company sponsored pension plans or their 401(k) into investment vehicles like self-directed IRAs, which I happened to really like for specific reasons. The reason is because it gives investors more control than traditionally traded assets like stocks and bonds, which you’re forced into. If you have a self-directed IRA, you can basically pick and choose what you want to put that money into. That’s a mouthful there but my question to you is, what are your thoughts on using self-directed IRAs when it comes to real estate or anything related to real estate?
It’s a good use for it to get the money out. I’m all for that to get it outside of the trappings, of having to go with stocks, bonds, and mutual funds that those guys like to have you buy. Once you get into real estate and you’re starting investing, the problem with those accounts like a self-directed Roth, you can’t effectively leverage it. If you’re trying to buy a turnkey property with a Fannie Mae alone, you can get leverage, but it’s going to be that non-recourse. It’s going to be a point higher. It’s going to be a shorter maturization schedule. It’s going to kill the deal. What I tell most of my guys who are, none of my guys are younger so take this with a grain of salt, is that you want your money out of that, those qualified retirement plans as soon as you can.
The way I think of it is you’re going to pay the taxes sooner or later. You probably want to pay it sooner because I’m going to probably be paying more taxes in the future because I’m making more money. That’s what I’m trying to line up this game and to get it out of that stuff, so you can leverage it in better loans is the key. It’s a very individual decision but I’m proposing the other side of the coin. I had a self-directed IRA and the only thing that I could invest in was private money lending at 10%, 12%, which isn’t that great. I took the money out and then you avoid all these fees. I paid the taxes and I paid the penalty but I did the math and for me it was better off in the long run.
I think self-directed IRAs are good if you’re investing in notes or paper assets that generate income but don’t have tax benefits. My whole team, we tell investors that buying rental real estate in a retirement account is your last option. It’s not that it’s not an option but it’s not your first option. That should be your last resort if you don’t have investible capital outside of your retirement account because you’re going to lose the tax benefits when you put any kind of real estate inside a retirement account, like a self-directed IRA. You can’t flow through those depreciation write offs for 27 and a half years. You can’t get it. You can’t touch it.
There are certain situations like if a guy wants to start investing, but he’s got all his cash tied up in this one of self-directed IRA things. He can use that money to invest and it’s a good way of dipping your toe in before diving all in. You buy one property with your self-directed IRA. It’s like a lock too, it’s not like you have to sell the house. You can use the lock to buy that rental property and then more than likely they’ll come back to you a year or two years and then be like, “This works. Let’s sell the house.” Let’s get rid of the self-directed IRA and get the money out so we can start investing now.
That may be an option and that person would need to talk to their tax advisor or a tax professional just to see what the tax impact is doing that. Sometimes it may make sense just to liquidate that, put the cash back in the self-directed IRA, use that to invest in other investments. It could be real estate notes but build a portfolio up outside of the IRA. I like to tell people that it’s a last resort. It’s not a bad decision, it’s just the worst of your options.
I’ll use myself as an example. I got rid of my 401(k) probably about three, four years ago. Even after I was buying all these rental properties, I thought about it so much like, “This is bad. This is naughty. I shouldn’t do this. I shouldn’t cash out my 401(k),” but then I did the math and I said, “You’re going to pay the taxes sooner or later, I rather pay it now.” Then they’re like, “Then you get this 10% penalty, I don’t want a penalty.” If you’re going to be making 10% in the stock market or you’re making 10% or 20% in one of these rental properties, which I think you can do much better. You’re going to crossover in that 10% penalty in twelve months. Just call it eighteen months to be conservative and you’ll probably be better off. That was the exercise that I did.
You’ve got to run the numbers and if you do it right, the numbers don’t lie. You write two or three different scenarios and see where you’re going to be further ahead a year, two years, three years, five years from now. For many people who are doing it that way, they’re probably going to be further ahead in two to five years than they would be keeping everything within their IRA. It all comes down to running the numbers and seeing how it affects your bottom line, your income. You may need the help of a tax professional to do it, but it’s worth doing it, especially if you have a lot of cash inside your self-directed IRA. It’s a good exercise.
If you’re in the highest tax bracket, maybe you don’t take it all out. You leak it out over a few years to steal that highest tax bracket. That’s what I did and it’s the right way.
I’m glad it worked out for you. One thing I wanted to ask you about is something about your three rules when it comes to passive cashflow investing. I read somewhere that you have these three rules that you use to invest. Tell us about those three rules. What are they and expand on it if you can.
The first one is it’s got to be a hard asset. All the stocks and bonds and those kinds of paper assets, it’s not real. At the end of the day, it goes up and down based on some press release or somebody says something dumb or the management company does some public humiliation thing and it’s not real. Real estate is a hard asset, like gold and silver and that kind of stuff. That’s the first rule. The second rule is it has to be leverageable. For me, that’s the problem with notes. You could leverage stocks but then you’re getting a little dangerous there.
Real estate is the one thing that you can get this government subsidized loans at super low rates for fixed periods for a very long time. Why not take it? Then the last is cashflow. It has to make sense in terms of income minus expenses. Real estate does that. The person pays this rent and these are your expenses and there’s a profit. It’s very simple. People talk about gold and silver, it does not create cashflow. Bitcoin is not real. People say it’s a cryptocurrency, maybe they have an argument on that but it doesn’t create cashflow and it’s not leverageable. There’s the future’s market but why get away and do all these exotic things? Real estate’s a good starting point.
I agree with you. Those three are keys. The income or cashflow is certainly a key thing. I want to see income coming in every month. It’s leverageable, which is a huge benefit. When lenders are willing to give you up to 80% towards the purchase where you only come up with 20%, you can’t do that with any other asset class. That’s a huge benefit of real estate. I’ll take as much of that cheap debt as possible to acquire as much as I can.
Then the other tangible value being a hard asset is huge. It’s critically important. It’s a commodity and it makes it an inflation hedge. Those are three beautiful things about income real estate that is hard to find, if at all with anything else. That’s why we love real estate. Do you want to make any comment about reversing the pyramid of traditional investing? What does that mean? Do you want to throw that out there?
When you first get started working in any corporate environment, they bring the vanguard or fidelity guy in. They always tell you, “You guys should be investing in stocks right now. When you get older, then we’ll switch to the asset allocation mix to more of a bond.” They’re basically telling you to go take out more risk now because you have time on your side. It’s completely the opposite. When you’re starting out, that’s when you’re most vulnerable. That’s when you should be trying to get cashflowing assets like a rental house and start building that on top of each other. You get ten of them to get $3,000 a passive cashflow so you can get food on the table.
That’s what puts food on the table every month. Start it that way and then go out and go and hit more doubles and home runs. I know you’ve got that marijuana fund. That’s fun but that comes after all the basic stuff. Get the simple stuff out of the way. Too often, novice investors, they get shiny object syndrome. What do you think of land investing? They’re like, “That’s what all the other rich people do.” I’m like, “The rich people do that because what you don’t see are all these cashflowing assets.” It’s behind the scenes and now, they’re just bored. They’re tired of these 20% returns a year.
I never thought about the presentation that Charles Schwab or some representative would give you in terms of making the base of that pyramid stocks. You’re right, you’re flipping it upside down because when you’re investing in stocks, if there are no dividends or cashflow, you’re a speculator. You’re just hoping the price of those stocks goes up. To me, that’s speculation, but when you flip it upside down, you’re focused more on cashflow and less on speculation. Then as time goes on, you built your base of assets and your base of cashflow. Now you can start bringing on more speculative investments, whether it’s stocks or private placements in new ventures. I liked the way you think about that.
Those guys are super misleading. It’s like mean girls when she told the other girl eat butter and it lose weight. If you wanted to have people work forever, you go tell them go invest in stocks.
I’m on the belief that everyone who is not a full-time real estate investor is busily involved with everything else in their life, their career, their family, their friends, their hobbies, their kids, whatever it may be. What final thoughts and advice can you give busy professionals out there and investors looking to grow their real estate portfolio?
It doesn’t take that much time. When we were in college, they always told us some rough rule or every credit you take is an hour or two of studying per week. I would probably say with real estate investing is for every house you have maybe 30 minutes to two hours a month and as you get ten of them, that definitely goes down because you’re working more in bulk. It really doesn’t take more than an hour or two a week. Most times, a lot of us, because we’re so spun up type working professionals, we spend our time on the computer building our spreadsheets to tell us how we’re making money when it’s pretty obvious. I think that we based on that a lot of time. If you want to get down to the essentials, you can knock this stuff out in an hour or two a week. You’ve got to ask yourself the question at the end of the busy work day, surely you can find one day, we can find an hour or two. Just don’t turn on the Netflix for that one day.
That comes down to how dedicated you are. How determined you are to achieve your financial goals and start building financial independence for yourself. We all have the same amount of time in the day and you’re going to spend those 24 hours doing something and you could choose to watch Netflix or you can choose to spend an hour or two a day or a week towards your financial education. I’ve heard people jokingly say that people will spend more time planning their vacation than they do towards their retirement. That’s crazy but I guess it might be a reality.
You said it earlier, save; put the money to the rental property first, then go spend the rest just like here. Spend the two hours a week on this rental property research and stuff like that. Don’t do it too much. Try and buy it, put the emphasis on the buying it. Then go watch Netflix for Tuesday, Wednesday, Thursday, Friday.
The thing is if you’re on a fixed income and you can’t change that easily, you have to pay yourself first. You should do it either way, but if that’s difficult, you need to look for ways or means to expand your income because if you can’t do that, you’re not going to be able to accumulate the investible capital to put towards the purchases and acquisitions of these rental properties or syndications or whatever it may be.
You have to focus on your top line more so than your bottom line, especially in the beginning because if you want to accelerate the pace that you achieve your financial goals, you have to start putting money towards it. You have to start accumulating these assets. For some people that’s easy to do. For others, it’s hard, but that’s where your focus needs to go. That’s my opinion. I’m going to stick to it.
Sometimes I just say, “If you’re happy with how things are going now and if you’re fine working for another 20, 30 years and having the lifestyle you have now, then fine, don’t do anything. If you keep complaining and coming back to it, that’s a signal you have to make a change.”
You’ve got to be willing to do the hard things today and putting all that time and energy towards it now because if you don’t, you’re going to be spending the next however many years, the rest of your life, trying to make up for what you could have made today or accumulated today. Plant the seeds early as early as you can because then you’re going to have a more fruitful tree down the road. Lane, I want to thank you for coming on. Tell our audience how they can find you or get more information about what you do and write about.
They can check out my podcast, Simple Passive Cash Flow. I started that a little over a couple of years ago. It was a way so I didn’t have to keep answering the same questions over and over again to my friends. I’ve been doing that every week and if people want to connect with me, my email is Lane@SimplePassiveCashflow.com. It’s always interesting connecting with folks. Thanks for having me, Marco.
Lane, thanks for coming on. I appreciate your time and your nuggets of wisdom. We’ll be talking to you again soon.
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