Why this guide?
I am just like most of you. A working, middle-class guy, who dreamt of starting a business or investing in something and becoming rich one day. Yes, one day.
Yet I chugged along in the middle-class, work -> 401k -> save-a-bit -> then lose-most-of-that routine, for-way-too-long. Had a couple of tries on businesses. Some worked okay for the short run, some failed. Tried real estate investments for a while and it seemed to be working fine for a while. Then after 9/11, it failed dramatically. Main reason for that collapse was not the shrinking of the economy. I could have simply blamed the economic downturn and would have tried to re-do my investments, again, exactly the same way as I did earlier. Of course, the downturn contributed for the failure but it wasn’t the main reason. My planning was bad. My training was not that well rounded. My execution was not that precise or methodical. I wasn’t prepared for any downturn. To add to the misery, I lost my job too. And being on a work visa (H-1B) didn’t help at all. No one wanted to hire a foreigner and sponsor a work-visa at that time. I didn’t have money, some days even to eat. Thinking of it, maybe I was a bit different from most of you. Not in a better way but in a far worse way.
But I kept going. I don’t want to say, that I was so tough so I could just take any crap etc., I just kept going.
I retrained myself and re-entered the work force. I changed my field from electrical engineering to information systems. Moved across the country from Texas to Northern California, then to Virginia and to back to California, this time to Southern California. Once I start getting a decent income from my job, I really wanted to start investing, again. Wanted to start a business and pursue my entrepreneurial dream.
But now I have a decent job. And a nice pay, which after paying for taxes was enough for my rent and for other necessities, like food, clothing, minimum savings in 401k and for some vacations. Little bit of money in personal stock market accounts. And that’s it. Lose my job and I would lose my ability to feed my family. So, I really wanted to find a way to be financially independent. Though I didn’t know where to begin, my entrepreneurial and investing dreams just kept coming back.
Stock market investing seemed to be the way! Warren Buffet did it! I am a pretty smart guy (so I thought), and bought some good books on stock market investing. Believe me they were real good books. I really liked Benjamin Graham’s books. My value investing actually worked alright most of the time. Problem was, even when the returns were good enough, I could not invest millions in the stock market to make my total returns significant. And at times, small downturns wiped out all my previous few years’ worth of gains. Sound familiar?
I wanted to start a business. What business? A franchises? Or start your own business from scratch? IT consulting? Or tutoring kids? May be some great technological innovation, be the next Google, Tinder or Facebook? (pooh!). And so many other ideas too crossed my mind. Some of them would not have been businesses at all, had I started, but merely a tiring self-employment. Some of the others, like a franchise, would have been just slaving myself to make others rich.
And having a family to take care of and a comfortable job to fund that need was a hindrance, so I thought. Almost all of the books that I read about entrepreneurship said, ‘Fire your boss’. Not that fast buddy! Last time when I had that mindset, roles were reversed and I got laid-off.
So, I really didn’t want to lose what I have. I wanted to perform really well in my job, preserve it and still start a business and make it very successful. It will need a very big time-commitment though. But who would have that kind of time? I could only spare a very little time a day after my job and attending to my family. And that is not a way to start and run a business. I didn’t want to take time away from my job and then being mediocre in what I do at work. It will be unfair to my employer. And chances are that I would get laid-off again or may be even get fired.
Last time it was so hard for me to find proper employment after being laid-off. It was very bad! I didn’t want to taste that crap again!
The fear of losing what I have, kept me from reaching what I can!
How can I be entrepreneurial and be on the path to financial independence, while still keeping my job, at least for the short run? Intending to find the best, I studied so many different businesses, read way too many books, magazines and attended many seminars. Real estate came up over-and-over again as the best choice. But what kind of real estate? It is such a vast field. Single family homes, rehabs, tax lien certificates, lands, notes, multi-families, mobile home parks, foreclosure sales, other property auctions, are just to name a few. If I want to do all, probably I would end up doing nothing.
When I used to invest in single-family homes, in early 2000’s while in Texas, it seemed to be a good choice. I got good tenants and some positive cash flow. And then I prayed for appreciation, so that one day I can realize the good fortunes when I sell. Kind of speculating than investing. Actually, the property values were going up and I was seeing my net worth going up on paper. The problem was that, I couldn’t eat that paper! Not in that form, may be when it was still straw!
And, now I am not living in Texas but in California. And this is not year 2000. There is no way I can buy single family rentals in Southern California with the bloated-out prices here and still get a decent cash flow and then keep repeating it, for it to make any sizeable positive impact in my pocketbook.
So, I researched into all the above categories of real estate investing, trying to pick a few winners that suit my situation. A few of them, including small multi-family properties, mobile home parks and rehab and flips turned out to be most lucrative. I needed one lucrative niche to start with. The more I researched in to that, the more I was convinced, that small multi-family investing indeed, is the way to go.
In the next blog post, I will explain why small multi-families are the best for me and most certainly for you too. There let’s explore what kind of small multi-families has the best shot in making you financially independent and can create enormous wealth for you. Then in the next posts, I will share what I learned and apply every day in my small multi-family investment business.
So much of what I learned and use came from so many different sources, which I had to spend a lot, yes, a really a lot of time, money and effort. I learned from paid coaches, mentors, from so many books, both printed and audio, from blogs, videos, from brokers, and from fellow real estate investors. And through both bad (really bad) and good experiences. Some of the sources that I gathered knowledge from was so scattered and sometimes kind of chaotic. I started arranging what I learned in a nice logical way so that it would be easy for me or my associates to refer to. I started sharing what I know with a few of my friends, who too embarked on the journey to financial independence via real-estate investing. Then it hit me. Life has been good to me lately. I should pay it forward. I acquired so much good knowledge from some of the best in real estate investing and also in other related fields. I should share what I learned with a broader audience so that they can use it to realize their financial goals. And they won’t make the stupid mistakes that I made. Or someone can get where they want to be in real estate investments faster than I could. And for me, I will see the picture much more clearly with my effort to write it down for someone else to grasp. I will be an even more clear minded and a better investor.
Am I creating competition for me here? Will I lose my chance to get that great deal because there are so many folks that would be using my techniques to compete with me? Or that good deals are so scarce!
Not really. Whether I teach or not, people are buying investment properties. It has been that way for centuries. Only thing is that, many of the so called ‘investors’ buy them wrong, really wrong!
And about not having enough good deals for all of us. Drop that ‘scarcity mentality‘. That will not get you anywhere near your dreams. If you have that scarcity mentality, you will be scared of competition. You will really believe that ‘all the good deals are gone‘. Or will think ‘why someone will sell you that property at a good discount?’ Or ‘why the other investor won’t gobble it up, if deal is so good?’ and ‘Something must be really wrong there!’ And you will not take the necessary actions as you believe that there are no enough good deals or the deal is bad!
So, drop that scarcity mentality. That is just plain BS.
There is enough to go around. There is enough for all of us to have.
I will be sharing my journey with you. I will share all the practical lessons that I learned or would learn. I will share the secrets that I come across. I will share my mistakes and failures too so that you can avoid them, at least can avoid most of them.
Stay with me, I promise, it will be worth it. Soon you too will start on your way to financial freedom and prosperity!