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first of every month

the power of passiveness

literally, it is clockwork, the first of every month, the rent checks start coming in. of all our revenue streams, rental income is the most reliable and stable. my wife and i live a very modest lifestyle. most of our friends do not know our financial situation. a few of them think i am extremely shortsided by not having any life insurance.  especially with a young child, they figure i should have at least term life insurance. little do they know, i am relying on a diverse rental pool of income. with the rental income, i feel if anything happened to me, my wife will be fine to rely on the stream of rental monies. we currently get 33k  a month in rental income. unlike our business incomes, which can easily turn south, the rental income has been steady and growing. in fact, there are many times when i considered getting out of business for the very fact that the businesses can be an anchor that brings me down. i need to write about that in a blog ” how my net worth is in danger “

like a potato chip

my first rental wasnt supposed to be a rental. i was looking for a home for a business partner. i found a 3bd, 3bth relatively new townhome. it was built in late 2007 and sold in 2008 for the high 400s to the low 500′s. the bank had taken it back and sold it for 195k. my partner didnt want it so i bought it as an investment. i rented it out quickly and after i got that first rent check, i was hooked and got more rental units. i am up to 17 tenants and would love to keep growing this slice of the investment portfolio. again its the most dependent revenue stream i have. i wish there were more deals like this one. the market is hot right now with low inventories so i will wait till the end of the year. i presently dont have any capital any ways. i have 6m invested on flips and the 2 custom homes that are being built.

my rental criteria

i look for high cap rates, ratio of rent to purchase price

for future appreciation, i try and get units that can be developed in the future, this gives me a second potential multiplier

look for areas that are highly desirable

also, because of my busy schedule, i try and look for units where rental amounts are high. i look at each tenant as a potential nuisance and want to be compensated for the potential trouble

dont forget about the hidden and lurking maintenance costs

so saturday morning, i meet with an interior designer and tour the 4 homes we have coming on the market. excited but a lot of work to get the homes all on the market in the next 3-4 weeks.

next, i go to one of the homes to help plan out the move of a squatter’s possessions. sad, how they have more rights than the home owner. we also have to redo the landscaping. jerk, let all the plants and grass die. this is going to a future entry about my stupidity in trying to help this guy.

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parents watching their children perform

finally, took my 3 year daughter to a local school fundraiser. “the world fair”. even though this isnt the school my daughter will be attending regardless of the whole private vs public decision, this school is very similar if we do send her to public school. this event is like a glimpse into my future saturdays as so many parents volunteer to help this school raise money. i think they raised 140k last year. will all the work put in, its great to see the results match the effort. the school is so smart, the students make class performances, thus the entire school attends this event. first time i attended and was impressed. a ton of crazy inflatable jumpers, silent auction, food booths, games, toddler land, water park and the aforementioned class performances. my daughter was at first afraid of the jumper below, but it wound up being the only jumper she wanted to go in. all she wanted to do was watch all the kid performances. cheap date, wasted tickets; boo!!!

only jumper my daughter would go on.

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you are the average of the 5 closest people to you. think about how true this is. what you do, where you go hang out, all is influenced by your friends and their suggestions. hey, i heard about so and so, lets go try it. how many of you guys remember that Friends episode where joey, rachel and lisa were having trouble going out to establishments which were on the pricier side since they didnt make the same amount of money as ross, monica and chandler? the social economic situation almost necessitates that those that are similar will associate together. i get a chance to guest speak at a lot of local collages, my number 1 advice for the college students is to network and be around as much as possible the people they want to be like. they will be the positive influence and its much easier to be like them if you are around them to mimic their actions.

Time to Step It Up

i had lunch this week with an old friend. very successful businessman who is in YPO, young professional organization www.ypo.org. its basically a professional organization that is comprised of young professionals at the executive level of companies that are of at least a certain size. my friend quickly grew his company to over 70+ million dollars and the company became a household name. i admire him so much, more for the type of person he is than his professional successes. he always is giving back to the community and is very down to earth. i was honored that he thought i should join YPO. there are chapters around the world with each chapter being 50-100 members only. each year, only a few spots open up and thus they are naturally very selective in who they invite to fill those vacancies. i am intrigued to join such an elite business fraternity. to be able to tap the fellow members for advice along with all the business opportunities would be phenomenal.

Judge Me Not 

personally, not looking forward to being scrutinized professionally and personally. part of what got me to where i am today is not caring what others thought. i just consistently did what i felt was the right to do, totally disregarding the opinions of others. most of these members are huge in the business world. roughly 1/3 of the members are executives hired to manage the companies they represent, 1/3 are inherited family businesses and the final 1/3 are people that are self-made people like myself. it is almost like the nouveau rich trying to fit in with the old guard. i already know i dont live like them. i dont know anyone that likes to be judged. for me, its not the fear of rejection, its the process itself of letting other people dictate my fate. dont want to do a dog and pony show and put in all this work to be accepted. another part i guess is that if i felt more accomplished than i would feel more worthy and ready to associate with these people. and of course, there is a part of me that is intimidated by being in the company of these individuals. i know i would get so much value in being around them, worried that i would be the weak leak in the chapter and not being to give back. doesnt work in life, if you simply take. it needs to be a symbiotic relationship.

Negative Positive Pressure

if i do get it, an issue would be surrounding yourself with all these dynamic ambitious people. one doesnt join such an organization to kick back and coast from here on out in life. for me, it wouldnt be a competitive thing, like i am trying to do better than them, it would simply be a situation of where you would what to do like what those around you are doing. i have been deeply contemplating retiring. i know i have enough funds so i question whether joining an organization like YPO is really committing myself to the continuation of the hectic pace my professional life has been on the last few years. if i dont spent the money i have already, why do i need more.

To Be Determined

can i get into YPO

do i want to keep going and striving for that next level

do i apply now into YPO or wait for later

 

we cant all look this good

you will have to forgive my blog. first off, i am not a great writer. secondly, i am not going to put the time into crafting each entry to be aesthetically pleasing (although, i just learned to insert pictures, woohoo). sadly,  the blog wont be a great narrative with theme, body and conclusion. i’ve read some great blogs that had it all, content, flow, great writing, and i think to myself, wow – professional.

well, i am an amateur here and will remain one. hopefully, the blog will improve and so will my writing, but thats not the point.  i am hoping to write about some investment opportunities and other ways people can earn a higher return on their investments so they can reach the 1% club. content that i dont see elsewhere.

i am not trying make money off this blog, so no advertising and stuff like that. i am hoping the blog will help me meet a lot of interesting people, people whom i can do deals with and have fun while making money.

upcoming posts:

1) a business deal i am working on -will write about whether we get the company or not. a lot of great interesting lessons about this deal. i have to wait until the opportunity is played out. obviously, cant write about deal in real time less i really want to jeopardize the deal. looking at a 225% return in <2 years with zero risk.

2) a squatter in one of our flips just moved out, so will share numbers on this flip and my stupidity in trying to help someone out.

3) angel investing – can only be done correctly in one way

STILL LOOKING FOR CO-OP BLOGGERS, divide and conquer i say

http://www.wisebread.com/top-5-reasons-why-you-should-become-a-co-op-blogger?wbref=readmore

http://www.yaledailynews.com/news/2012/may/27/keegan-opposite-loneliness/?cross-campus

wow, she passed away this weekend. we think we have all the time in the world. i know i didnt grow up aspiring to work till i am 65.

blogging to get to the opposite of loneliness…

so i started sunday morning. just felt, lets go for it. read a ton of blogs, commented on as many as i could.

posted 7 articles over 2 days. mine are short and direct so no great feat. got a total of 200 hits. not sure if this is good or bad. it is what it is.

the one thing i see in all the blogs i read, there is no one touting the investment side. i see  a vacuum that maybe i can fill.

also see some immediate business opportunities in that space.

in the meantime, i would love to develop a co-op blogging group. anyone interested, please email me investlike1percent AT gmail DOTCOM.

http://www.wisebread.com/top-5-reasons-why-you-should-become-a-co-op-blogger?wbref=readmore

basically a group where we can all specialize. i am willing to sponsor large contests, i can get free webhosting and free seo.

1) i believe based on income its ~350k AGI.

2) on networth, around ~8.5M ( got this from calculator on http://blogs.wsj.com/wealth/?mod=WSJ_topnav_personalfinance, its on right hand side, middle of the page )

cant show someone how to make more income right away. can show how great investments at high IRR can build great wealth. a penny doubled 32 times is a million dollars. we all can start with more than a penny.

hopefully this blog can show the merits of low risk/high reward actively managed alternative investments.

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