Discover Your Why. Establish Your Goals. Set Your Investing Criteria.
Author: W2 Capitalist
I have built this community to connect motivated and ambitious W2 employees who have a successful and fulfilling job but want to build wealth for their family through real estate investing.
What makes me the expert? Depends. I’m not the expert to everyone, but I am the expert if you’re behind me on this journey. I’ve been climbing the corporate ladder since 2001 and started actively investing in real estate in 2014. I currently hold a portfolio of 323 units, including single family residences, small multi-family residences and apartment syndications. Since my wife and I started investing, we have grown our net worth 10x and increased our annual income by 60% with these rental properties.
This is mentoring session #1 with Preston – The Industrial Salesman. Preston lives in Mobile, AL, has dabbled a little into real estate and unfortunately has had some partners that didn’t work out. His fiancé is onboard with the whole real estate investing idea (KEY!) and main goal this year is to add $4,000 in Gross Passive Income from rentals.
This is mentoring session #2 with Nick – The Corporate Recruiter. Nick currently lives in New Hampshire but is in the process of relocating his young family to Texas and with one turn-key rental in his portfolio, he is looking to house hack a small multi-family.
Today I’m joined by Eric, small business owner near Palm Springs, FL, for his first recorded mentoring session. Eric has never purchased a house but is anxious to get into REI so he can pursue more time being a missionary with his church and other organizations he is involved.
Today I’m joined by Gino Barbaro from JakeandGino.com. Gino is an investor, business owner and entrepreneur. He has been investing in real estate for 15 years and has grown his multifamily to over 1100 units in just 6 years with over $70MM in assets. Gino is the best selling author of ‘Wheelbarrow Profits’, graduate of IPEC, a Certified Professional Coach and currently resides in Florida with his beautiful wife and six children.
Key Discussion Points:
How Gino Sets Goals
Equity Hounds
Ultimate Goal of Financial Freedom
How / When to Teach Your Kids About Financing & Saving
Accepting Societal Change Input From Your Kids
The American Dream is Dying, if not Dead
Gino’s Best Advice to Raise Money
Gino’s Best Advice to Stop Exchanging Time for Money
Gino’s Thoughts on Market Direction and if He is Worried
This is mentoring session #1 with Preston – The Industrial Salesman. Preston lives in Mobile, AL, has dabbled a little into real estate and unfortunately has had some partners that didn’t work out. His fiancé is onboard with the whole real estate investing idea (KEY!) and main goal this year is to add $4,000 in Gross Passive Income from rentals.
Today I’m joined by Holly Morphew. She is a successful Financial Coach, Real Estate Investor and published author. Holly began teaching personal finance in 2006 as a service project with Rotary International. She received the prestigious “Rotarian of the Year” award in 2007/08 for her work in financial literacy. After a successful career in real estate and finance, Holly founded Financial Impact in 2016. Holly is recognized for her unique approach to money, which reinforces core values while creating wealth. Through workshops, courses, and masterminds, Holly has coached thousands to peace of mind and confidence with their money.
5:30 a.m. – focus on today’s real estate entrepreneurial tasks while consuming an audio book…also drink more water
7:15 a.m. – breakfast with the family and, of course hygiene!
7:45 a.m. – first call for the W2
So let’s walk through this in more depth, but before we go any further let’s clarify some things. I’m not a perfectionist and I’m not striving for perfection, I AM striving for excellence. This is meant to be a guide and a plan. Having 2 kids, 4 years old and under, with a 3rd on the way has its challenges of keeping any sort of routine, and this is why I focus on doing mine early in the morning before the rest of the house wakes up. That and essentially at the end of the W2 day I’m typically to mentally exhausted to want to do anything else except hang out with my kids and wife.
4:45 Alarm – Are You Serious?
Yes I’m serious but don’t think I decided to one day just wake up and that was that (also to note, I’ve never been a morning person). I tried setting my alarm at 5:30 a few times but just snoozed it. Like any other workout I had to ease myself into it. So, I move my alarm up 15 minutes early for 2 weeks (do something for 2 weeks and it becomes a habit right?!). After those 2 weeks, I backed it up another 15 minutes. After those 2 weeks, another 15 minutes and so on. Just like any workout goal, you don’t decide to just walk in the gym and do it or run a 5k from the couch, you have to work at it and rising early was the same for me.
Drink More Water
You’ve seen ‘Drink More Water’ a couple of times now. The goal here is 100 oz/day. A little back story here…until I gave into my wife’s wishes, I was consuming 4-5 sodas/day with a few glasses of sweet tea for dinner. Hardly any water. But after years of chipping away, I finally gave in and decided to try what my wife has been on me about and it’s AMAZING how much healthier I feel. Now don’t get me wrong, I still drink a soda or two at lunch and couple glasses of sweet tea typically at dinner time and a rare night cap alcoholic drink but my daily water consumption is 100 oz. The reason I drink 16 oz right when I wake up is because the last time I had anything to drink was right before bed…7-8 hours ago. My body is a little dehydrated. I have another 16 oz glass (or two) right after my quick workout and within an hour of waking up I’ve consumed a third (or half, if I drink two after working out) of my daily goal. And the reason I choose a 16 oz glass, is just for easy math – 6.25 glasses of 16 oz = 100 oz.
And notice until this statement I haven’t mentioned coffee. I will drink the occasional cup on days I’m not able to go through my morning routine but I’m not particular fond of what it does to my GI system 🙂 And I’m quoted several times in saying how Coffee is your friend. Replace coffee with your miracle morning routine as much as possible.
Light Workout & Meditation
I have come to the acceptance and conclusion that my dreams of being a star in the NFL, Mr. Olympia, or competing against David Goggins running in Ultra Marathons have come to an end. However, I do want to have the energy and stamina to keep up with my kids when they want to get out in the yard and play or wrestle in the living room floor. So, my light workout routine (right now) is either a 7 minute HIIT program or a 1 mile walk/run. And I put right now in parenthesis because due to some lower back injuries (stemmed from my Uncle Rico days), I didn’t workout for a decade. I’m slowly getting back into it and my current light workout elevates my heart rate, gives me a good sweat, but most importantly wakes me up in the morning.
I go straight from my light workout into meditation. This is something new I’ve adopted in the last year and it has certainly helped with dealing with anxiety and stress. I see it as an exercise for my brain and I’m upset it has taken me this long to discover and try it out. There are plenty of apps available to assist with this and I highly recommend you find one that provides you the most affect. I use Headspace, which is free to try.
Real Estate Investing Tasks
I focus on 12 Week Goals, led by the concepts discussed in the book The 12 Week Year by Brian Moran. This is also the concept we use as a base for successfully pushing our Mastermind Group members to the next level. BUT, my daily REI tasks vary from quarter to quarter, but the important thing here is write down your goals, create those daily tasks and track your progress daily. This also includes sharpening the grey matter. I’ve read and consumed more material in the last 5 years than in my entire life (my high school teachers would be proud). I list the most influential books on the Read Page and highly recommend Audible for knocking these out while you commute, jog, or tackling that honey do list.
On The Backend…
Meaning at night time…I still strive to grab 7-8 hours of sleep every night, this means I typically go to bed around 9 p.m. If this is unacceptable for you, I go into more detail of altering lifestyle in the How I Balance post, check it out. The bedtime alarm on the iPhone keeps me in check of when to go to bed. Amazingly, most people I tell about this feature have no idea that it exists. Check it out under Clock, here’s a screen shot of what mine looks like.
This book by Hal Elrod and David Osborn will change your life and is the centerpiece around my morning routine. We’ve tackled this in the W2 Capitalist Mastermind Group and practicing this routine will change your life. Here’s the link to the book on Amazon: https://amzn.to/2t8clHs
The Psychology of Negotiating Real Estate…Each month we focus on a different topic to study in the W2 Capitalist Mastermind and each month I bring in a virtual guest speaker who is an expert on that month’s topic. For the month of March 2019 that topic was Negotiating and Marty Nemko is the perfect guest to discuss this with us. Here is why:
This is mentoring session #2 with Brice – The Gold Mining Mechanic in North Pole, Alaska. Subscribe to our podcasts to receive episodes directly to your mobile device. And if you’re on iTunes and have 2 minutes, please give us a Rating and Review.
Key Discussion Points for Today:
More of Brice’s backstory
Building Relationships HUGELY important in REI
Know the potential liabilities for any property
Importance of grabbing actual financials on any potential acquisition
Using a trusted resource to physically walk a long distance property
In my year end post Reflect and Soar Higher in 2019 post, I committed to posting the results of my Q1 2019 Goals. As our focus in the W2 Capitalist Mastermind is based off Brian Moran’s book The 12 Week Year, I practice what I preach in my own personal quarterly goals. This system works. One thing I continue to say over and over is that we are not striving for perfection, we’re striving for progress. If we’re hitting perfection, then simply put, we’re not pushing ourselves hard enough. Here is how I did on my Q1 2019 goals:
Launch Alexa Skill for Real Estate Investing for the W2 Employee
Accomplished
4,500 Facebook Group Members: accomplished by end of February. This goal was WAY too easy to obtain and as you’ll see below I’ve increased this target substantially for Q2.
Launch Alexa Skill for Real Estate Investing for the W2 Employee: this was also accomplished by end of January and I’m certainly stepping it up this quarter by launching a podcast. Now I’ve put producing content for the Alexa Skill on hold as I also went to Podcast school and launched our W2 Capitalist Podcast in March.
Failed
30 Active Students in the W2 Capitalist Mastermind Group: I fell short here. Primarily because we grew so fast in December I doubled the price of joining in January to slow growth as I had to get a handle on it. I did not want to let the current members down and had to do something to slow growth. This is a GREAT PROBLEM TO HAVE and I’m glad I have it. As I write this post I came up short of my goal by 8 students.
Enough of the past, let’s look to what’s ahead. Here are my goals for the next 12 weeks:
I can’t tell you HOW EXCITED I am to finally have the W2 Capitalist Podcast LIVE. In doing so, I’ve already had the pleasure of talking to several awesome folks and you’ll be able to hear that content in the weeks to come.
Enough about my excitement, now here’s how you’ll benefit (in addition to the awesome content I’m going to bring you every week). To celebrate the launch I’m working with Raffle Copter on giving away numerous prizes:
(1) 12 Virtual Mentoring Sessions ($2,400 value) -> one lucky winner will receive 12 Virtual 30 Minute Mentoring Sessions. You have up to a year to claim them all so you can do once a month for a year, twice a month for 6 months, once a week for 3 months and/or combination of all.
(1) Mindset Calibration Course ($272 value) -> one lucky winner will receive my 6-week self-paced course designed to approach Real Estate Investing FOCUSED on YOUR WHY and YOUR PURPOSE.
(1) Super Comfy EARN. INVEST. REPEAT. t-shirt ($25 value) -> one lucky winner will grab one of our super comfy t-shirts and I’m even throwing in shipping. If you can’t wait until the contest is up to grab a shirt, you can go ahead and order one here.
(1) Rich Dad Poor Dad by Robert K. ($15 value) -> this is the book that provided me with a paradigm shift in the way I look at money and building a life for my family, WHICH is why it is the foundation of required reading for anyone I mentor.
Registration closes by April 21 @ 11:59 p.m. CST and the winners will be announced by April 23rd @ 11:50 p.m. CST.
Earn EXTRA Entries by:
10 EXTRA entries = Refer your friends – up to 10 extra entries
This is mentoring session #1 with Nick – The Corporate Recruiter. Nick currently lives in New Hampshire but is in the process or relocating his young family to Texas and with one turn-key rental in his portfolio, he is looking to house hack a small multi-family.
This is mentoring session #1 with Brice – The Gold Mining Mechanic in North Pole, Alaska. Subscribe to our podcasts to receive episodes directly to your mobile device.
Key Discussion Points for Today:
Intro to Brice
Going from 2 units to 6 units
Strategy of Doubling Doors with each new transaction
I talk about this a lot, Hell it is THE challenge for Week 1 of my Mindset Calibration course. HUGELY important to know WHY you want to be involved in real estate investing. As I’ve been on BiggerPockets forums lately, I have been challenging lots of newbies on WHY they want to get started. Even when I tell them money can’t be the answer (a most certain by product if done right), the answer to the first couple of evolutions to this question is typically: to obtain financial independence (money), to have another stream of income (money), or to create wealth (money).
IT IS NOT ABOUT MONEY!!!
Money is a by-product from investing in real estate, or at least it should be if you have set proper and strict investing criteria and are patiently sticking to them. MONEY IS NOT YOUR WHY.
Real estate investing is NOT EASY, especially to start. That is why it is ESPECIALLY IMPORTANT to start out on this journey by discovering YOUR why for wanting to be involved in real estate investing. And when I’m writing about this concept typically I type YOUR in all caps to emphasize YOU. It is YOUR WHY, not your mum’s, not your dad’s, not your brother’s or sister’s nor your friend’s, it is YOURS! Focus on yourself here.
Think of this scenario. You’re just starting your pursuit for your first property, without a WHY. If you don’t know YOUR WHY, you don’t know what goals you want to accomplish and then you certainly don’t have any established investing criteria to analyze deals. And not having investing criteria or sticking to those investing criteria will get you financially into trouble. Speaking from experience, the only time I’ve lost money in a real estate transaction is due to one or two reasons (a) I didn’t have a clear picture of my Why -> Goals -> Criteria or (b) I abandoned my established criteria that supported my Goals -> Why.
Knowing YOUR WHY Establishes Your Goals
“If you don’t know where you’re going, any road will get you there.”
– Lewis Carroll
Lewis Carroll hit the nail on the head with this quote. Meaning if there is no destination in place, like most of us who mind numbing-ly just get through the work day on the corporate carrousel, you’ll eventually end up…where?
Knowing YOUR why is the cornerstone of your investing career because it will lead you to establish goals that support YOUR why and from those goals you’ll establish supporting investing criteria. Think of the waterfall affect, your investing criteria fill up a pool of supporting drops to YOUR why.
For example: my WHY equals these three:
I want to provide generational wealth for these three. And yes that is money, but its not centered around me its centered around how my kids and (eventually…hopefully) grandkids can live a life outside of financial barriers – without acting like spoiled brats :). In the more immediate future I want to provide a lifestyle for us that isn’t hindered on anyone’s schedule except ours. In order to do that, like most wealthy men and women have figured out, I have to figure out how to stop exchanging time for money. This is a 3-5 year goal for us. MUCH BIGGER GOALS beyond the 3-5 year mark have been discussed but seeing as they are not super clear and secondary, we’ll just focus on the more immediate, especially for the remainder of this blog post. And real estate is the best way for us to do that. In 2018, we made $231/hr from our rental properties.
Knowing your GOALS Establishes Your Investing Criteria
To keep our lifestyle and stop exchanging time for money in the next 3-5 years we need to accumulate passive rental income from 100-500 doors. The reason the # of doors is such a wide range is because ownership in each unit can vary based on partners and our participation level but it is somewhere in that range. So, our investing criteria is pretty simple cash flow per door is $100+/month and yields a 15% Cash-on-Cash return.
Challenge: Do The Discovery
What’s YOUR why?
I want to challenge you to discover YOUR why. And if you already think you know what that is, go through this exercise anyway. As you being pursuit for your first (or next) property, you will potentially kick over 100s of rocks before you find that gem. This can be exhausting work, physically and mentally, especially since you don’t know when you’ll reach the closing table. This process can be an emotional roller coaster (which we want to stay away from our emotions as much as possible – this is a #s game) but knowing and being very clear about YOUR WHY will help you stay grounded with your emotions and help you stick to your established criteria once you find a potential deal.
Having trouble discovering YOUR why?
If you’re having trouble discovering YOUR why, you are not alone. This is normal. You are normal! Also accept as life changes, situations change and YOUR why has the potential to change as well – I call these course corrections. Point being, discover IT right now, begin pursuit and make changes down the road. A couple of resources to help you discover:
7 Levels Deep : take some time to go through this exercise. This site says 10-15 minutes, but take as much time as you want. If you’re pressed for time, rush through it and then come back and do it again once you have time.
In this episode of The Best Job For a Real Estate Investor, I’m joined by Michael Zuber and Jamie O’Brien, both traveling salesman but at different points in their careers.
Michael has been investing for 15 Years through his One Rental At A Time concept, has now retired from his successful W2 career and focusing on real estate full time. Jamie is at the opposite end of the spectrum by recently expanded his sales territory and been investing for just a couple of years.
After talking with Michael and Jamie, I’m CONVINCED that being a Traveling Salesman ISTHE BEST JOB when it comes to investing in real estate on the side. And THE BEST part of this conversation happens toward the end, so be sure to stay until then or skip ahead.
Key Takeaways:
Difference between a “rookie” race horse and a grey haired stud in the barn.
“One of the worst days of my life was receiving a Platinum Travel Rewards Cards.”
~EARN. INVEST. REPEAT. 