Latest / Cash Flow for Life / Chapter 25: Create Lifetime Wealth
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- 00;00;00;02 - 00;00;32;03 Chapter 25 Create Lifetime Wealth. Look, I got a pause and say congratulations for making it this far. We're at the last chapter. You've stuck with me. You've stuck with the learning. Congratulations. Well done. By now, you know more about real estate investing than most people out there. It's an amazing accomplishment and you should be super, super proud. In this last chapter, Create Lifetime Wealth, we're going to put it all together and teach you how to make this a business going forward for lifetime wealth. 00;00;32;05 - 00;01;04;27 After reading this book and getting to this last chapter, how do you feel about that? Have we realized our goal as authors and mentors to save you time, money, and hassle? By helping you avoid our mistakes? We didn't intend for this book to be the end all, be all of training and mentoring. We do hope that it's given you enough information and shared enough of our expertise that you're now firmly of the belief that you can create lifetime cash flow through rental real estate investment. 00;01;04;29 - 00;01;29;02 You should be feeling ready to move forward and excited about your financial future as an investor. Nothing has been left out as to the strategies and sound investment practices. It's now time to increase your knowledge and hone the techniques we've introduced in this book. In doing so, there are some advice and guidance that we know will help you build your business faster and with less risk. 00;01;29;04 - 00;01;58;02 In this chapter, let's set the tone for your forward movement and your next business building steps. Collaborate, not alienate. You can either compete in an all out race against others, or you can collaborate with them as a team and pass the baton. The tendency of many new real estate investors is to believe that the best way forward is the solitary one. 00;01;58;05 - 00;02;24;13 Why share your knowledge and abilities with others when you can create lifetime wealth alone? While any single property purchase can lead to more money in your pocket, if you go it alone, your career and lifetime business will experience stunted growth and you'll end up with less. If you don't learn to collaborate with others, we've covered the idea of taking on partners to increase your financial abilities. 00;02;24;15 - 00;02;52;04 But there's really more to it than that. Multiple rental properties will drag you down personally, financially, and energetically if you continue to grow without some help. Without some support. Delegation and partnership. Even if you are doing well, handling the load and the multitude of details and management tasks, how much can you grow? If you remain a sole investor who collaborates with others only when necessary? 00;02;52;06 - 00;03;20;14 Sure, we've given you instruction on building a success team, but it's not just about hiring the best and monitoring their activities. Ask yourself this question would I rather own ten properties generating $75,000 a year in cash flow, or partially own 50 to 75 properties generating $500,000 plus in cash flow a year as my share? If you're still not sure. 00;03;20;18 - 00;03;49;20 Ask yourself if I could spend less time and work less hard to get that $500,000 because I've involved others. Which choice is best for me? Build and operate your business any way you want. This is personal to you. However, be fully aware that the greatest rewards almost always come to those who understand the value of collaboration. Lead your team. 00;03;49;22 - 00;04;20;00 Let's take this collaboration discussion to the next level and talk about building and leading your success team. There is flexibility in how quickly you build your team and which members you can choose before others. However, there is a method in our stages. Stage one. Stage one. Team members require little or no investment on your part. They are mostly service providers who get paid when you receive the service or benefit. 00;04;20;03 - 00;04;45;22 Actually, you could consider the real estate agent and mortgage broker as free, except you know that the property price has the real estate commission built into it. Even if the seller technically pays it and the mortgage broker services come with fees, but they're not charged unless a deal is closed and often paid by the lender. Your insurance agent is also free for advice and help becoming a paid team member only when you purchase a property. 00;04;45;28 - 00;05;09;03 Even then, the insurance agents cost is all part of the premium, so there's low risk in involving your stage one team members, and you should be quick to get that part of your team in place right away. Stage two with home inspectors and real estate attorneys, you're running into fees that may be charged even though a transaction does not happen. 00;05;09;06 - 00;05;35;10 However, there protective fees protecting your interests and helping to keep you out of trouble. Accountants, bookkeepers, and appraisers are also pretty much arm's length team members, only charging you fees for service performed. Your handyman selected in stage two is really the first time you have someone working for you. Either as an employee or more likely, as a subcontractor. 00;05;35;12 - 00;06;01;24 In this stage, you must begin to learn how to manage not only your properties, but your team members as well. Stage three. It's in this stage of team building that you really bump into limitations. If you restrict the involvement of the team members in your business. Property management companies, partners, associates and private investors can only be involved as you let them be. 00;06;01;26 - 00;06;27;26 The more you limit their involvement and intimacy with your business. The more you limit your growth. This is when you really need to learn how to be a leader. Involve these people by providing leadership, but also by allowing them to be part of your business. Building these relationships will give them a sense of being part of the business, which will cause them to put more into helping you grow. 00;06;27;28 - 00;06;50;11 Think of your business as a company that requires one on one sales at kitchen tables to consumers. If it's just you at the table, how much can you grow? You need these team members, and they need to be involved enough to foster your growth, to reach your goals. This is crucial to building a large and sustainable real estate investing business. 00;06;50;13 - 00;07;16;19 Heck, even a small real estate investing business needs this type of philosophy to keep you having fun and to get your time back. Whether with employees, subcontractors, or hired professionals, you must learn to build these business relationships and nurture them for growth. The goodwill and active support of these team members, coupled with effective leadership from you, will result in the creation of lifetime wealth. 00;07;16;21 - 00;07;43;13 Find and use mentors. Of course, we're here to act as your mentors in implementing everything we introduce to you in this book and in our courses. As you grow your business, you'll meet many people who have already been where you are. They can be an invaluable resource for advice and help in reaching another level in your business. You could find mentors in many places, including the following. 00;07;43;16 - 00;08;14;01 Real estate workshops, real estate TV shows, online real estate investing groups. Real estate industry associations. Local real estate investment clubs, professional associations. You should always be on the lookout for mentors in life. Whether you're attending real estate seminars or reading about investing, there are mentors out there with invaluable help and advice. We're not talking about the guru who knows it all. 00;08;14;04 - 00;08;45;15 Though you may find one. We're talking about mentors who may have mastered one type of property investment or strategy. Mentors can be experts in one area or specialist in one type of financing. Others may have formed their own holding and management companies and be an excellent resource for you in those areas. Mentors can show up anywhere and provide inspiration, solid advice and training in one or many facets of real estate investing. 00;08;45;17 - 00;09;10;27 Some mentors you'll work with directly day to day as a type of apprentice. Some mentors you'll never meet. They just act as an inspiration to keep you moving. They are somewhere you want to be, and you're using that to motivate you to move forward. Keep your values. It's inevitable in building a large and profitable real estate business to bump into people whose ethics and values are challenged. 00;09;10;29 - 00;09;31;04 You don't want to go there. Encountering people who have compromised their values can make us defensive. These interactions can even create the desire to change our behavior and values as a protective strategy. Even if you get dinged a few times. You'll make more money in this business if you keep your value systems intact. Never go against your values. 00;09;31;05 - 00;10;05;08 Always make decisions based on them. Transparency. We should always be transparent in our intentions. Hiding our motivations or true intentions can only make it harder for the right people to become involved in our success plan. Defensive mechanisms can sabotage our plans. When we hide information or our true intentions from our team members. As an example, not being transparent with our mortgage broker can lead to the wrong mortgage product for our purchase, and it may be illegal in some cases. 00;10;05;11 - 00;10;34;24 Honesty. We may bump into dishonest people in doing our business dealings, but we always want to be considered honest ourselves. Those who do business with us and those on our success team will do more for us and contribute more to our success. If they are always firmly convinced and confident in our honesty and our good intentions. People who are defensive or less than honest will always seem to encounter roadblocks in their path to success. 00;10;34;27 - 00;11;02;29 They'll struggle to overcome these roadblocks, and some of these impediments will halt their growth. When you're honest with everyone, roadblocks simply become speed bumps. Merely a short slowdown in your business growth and path to success. Fairness. Real estate investing isn't a contact sport, nor is it an activity that requires someone to give up everything in a transaction so that the other side gets it all. 00;11;03;01 - 00;11;27;29 All participants in your transaction should feel like winners, with each one getting something of value out of the transaction. Whether it's our real estate agent, mortgage broker, or even the seller. Each participant needs to drive satisfaction and compensation from their participation in the deal. We never try to go around our real estate agents to save what they would have been paid in commission. 00;11;28;07 - 00;12;00;19 If they're involved, they should get paid. Bottom line. As landlords, we always examine the fairness of our activities and tenant relationships. Landlords who try to eke out every dime of a property and their tenants without giving anything back are the landlords. You'll also hear complaining about their declining cash flows and deteriorating properties, their vacancies. We're always reinvesting in our properties and our business, making our properties a nicer place to live for our tenants, and they do appreciate it. 00;12;00;21 - 00;12;26;11 Invest in your values. We're really big on energy efficiency and the environmental impact that we have. If we restrict our property improvements and appliance investments to those that contributed the most to this year's bottom line, we would probably never be installing eco friendly items. However, we believe that it's good to be earth friendly, so we choose these items to align with our values. 00;12;26;13 - 00;12;51;27 We'll spend more for energy efficient appliances, adding insulation and making improvements that save our tenants monthly on utility bills. It isn't always a trade off with profits either. We have researched and found rebates and government grants for efficiency renovations, and we're constantly filing for a rebate or a grant to offset most of the extra costs to do the job right. 00;12;51;29 - 00;13;14;25 You also need to look at the less direct rewards of this type of reinvestment in your property, because we've increased the efficiency of the properties. They use less energy and the tenants have lower utility bills if they ever consider moving. They'll find that a lower rent elsewhere can be more than offset with higher utility bills. So we keep our tenants longer. 00;13;14;28 - 00;13;40;22 Take action and keep doing it. Reading this book and learning everything you can about rental property investing is going to ensure your success. It's the best thing you can do for yourself, but only if you take action. Do something to get started in the field. Even if the first step is just getting a real estate agent and looking at houses, it could be just what you need to get moving. 00;13;40;25 - 00;14;11;26 While one of our goals has been to help you avoid our mistakes, we realize that you're still going to be learning by doing. Get out there and do something to break the inertia. Once you're doing something, keep at it over and over again. In 1901, Wilbur Wright told his brother Orville that humans would not fly for at least 50 years, even though they believed that they kept building planes and trying to fly, and they flew in 1903, just two years later. 00;14;11;28 - 00;14;38;14 You can't succeed if you don't get out there and try and take action. Keep trying until you create your success pattern and stick with it. Pay yourself first. Building a real estate portfolio requires leverage and reinvestment on an ever growing scale. In your first years, you'll be plowing as much profit as you can back into the business to add properties and cash flow. 00;14;38;17 - 00;15;02;14 Once you reach stages two and three, you'll have created a steady income from cash flow, but you will still be growing the business. You'll be diversifying into different property types and possibly even to commercial building. Private lending and private equity. However, through it all, you should be paying yourself in the first few years. It may just be the rewards we set out in our goals. 00;15;02;17 - 00;15;34;05 The rest of it is all plowed back into the growth of the business. As you build your cash flow. You'll want to do more in the way of retirement planning. Look into the various retirement savings plans. Whether for one IRA, RSP, TFSA, or savings or whatever savings account are recommended by your tax advisor. Begin to build these other accounts as a diversification strategy, and also to build assets that are a little more liquid than your real estate investing holdings, and you want them to be tax efficient as possible. 00;15;34;07 - 00;16;13;19 You're no longer worried about a job because you are the job. It's your business and your future. It's also your family's future because you're building generational wealth as well. Passing along a large portfolio of cash generating real estate is the ultimate family provider strategy. You continue to provide long after you're gone. Share and give back. The more you grow your business and the greater your cash flow and wealth, the more you should consider looking at how you can help others and give back to the systems and communities that afford you a secure and enjoyable lifestyle. 00;16;13;21 - 00;16;37;12 Help new investors remember how it was when you were out there searching for mentors, and how lucky you felt when someone shared some real estate investment knowledge and experience with you. Become a mentor for others. Sharing what you know and helping them succeed as you did. You can be an enormous resource to improve the lives of your family and friends. 00;16;37;15 - 00;17;02;27 You've become a successful real estate investor and your financial future is now secure. Why wouldn't you want to help your family and friends to improve their lives and their futures as well? Give them guidance and you'll find that helping others will come back to you many times over. Give to charities. Whether this is donating money, time or some old windows that you remove from a rental home. 00;17;03;00 - 00;17;26;12 Give back to the community. Help others and you'll begin to see that it's all about networking. Those who help will appreciate it and talk about it. And you'll benefit from this in many ways. We didn't really think that we had the time to volunteer or participate, because we were really busy building our business, working on houses and dealing with tenants. 00;17;26;14 - 00;17;51;16 What we found was that taking a little time away from those activities to give to others was always time well spent. Whether we were showing up to help build a house or helping with a charity event, volunteering, we always met new people and came away with business cards. The people we meet want to return the favor and help us, or they want to invest in something we're doing. 00;17;51;18 - 00;18;09;16 While contributing dollars to a charity is giving. It isn't the same as showing up for a habitat for humanity event, with your tools and some materials to help build a home for someone who really needs it. Maybe to mentor people that don't really know how to do the renovations so that they could go build homes for people as well. 00;18;09;18 - 00;18;31;26 You're here now. What's next? We don't know if you were dabbling in rental property investment before you picked up this book, or at what stage of learning you're at right now. If you are new to the business, we do know that having reached this point in the book, you're better informed than the vast majority of those who already own rental properties today. 00;18;31;28 - 00;18;59;12 You've read a lot of pages between learning about the Pareto Principle back in chapter one and this page here on right now. What you've learned in this book will change the odds significantly in your favor. Back there with the Pareto Principle in the first chapter was our 1030 60 rule for success, 10% motivation, 30% education, 60% implementation. You now have the first two. 00;18;59;17 - 00;19;22;29 So with implementation you're 100% ensured of success. You just have to go out and start doing it. We know you're motivated and we know you've amassed a lot of education in just this book. What's next isn't up for debate. You must go out and put this knowledge to work. We're not saying that you have to go it alone, or that you don't need some more knowledge, as well as advice and some support along the way. 00;19;23;01 - 00;19;43;11 We're here for you. What's next? You got to do something. Whether it's calling us to get some advice or mentoring or one on one coaching or signing up for one of our more advanced courses. You can't lose your momentum now. We can help you with multiple things in your real estate investing business. Or you could take this book and hit the ground running right now. 00;19;43;17 - 00;19;49;20 Everything you need is here for you in this book. Take the first step today towards your lifetime cash flow.