How do I make RE investing a business and not a hobby?

[John E.]

Hello BPers... My name is John Elmenhe, I'm 15 years old and I'm going to begin investing in real estate the day I hit 18 years old by trying to wholesale properties. I'm going to begin working soon and I'm NOT going to spend a DIME! It's all going into my savings account or a CD. RE investing is everything that I've wanted and more, so I'm not going to college. I've been reading RE/business books and taking online courses in creative RE investing. One piece of advice that I keep on getting over and over again is that RE investing MUST be treated like a serious business, and not some hobby you partake in on a Saturday. I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment. Also, does anyone have advice on what necessarily constitutes a professional RE business? Should I form a legal entity? Get an office with office supplies? Dress up in a formal way? Your thoughts?

[Duncan Taylor]

Originally posted by @John E.:

Hello BPers...
My name is John Elmenhe, I'm 15 years old and I'm going to begin investing in real estate the day I hit 18 years old by trying to wholesale properties. I'm going to begin working soon and I'm NOT going to spend a DIME! It's all going into my savings account or a CD. RE investing is everything that I've wanted and more, so I'm not going to college. I've been reading RE/business books and taking online courses in creative RE investing. One piece of advice that I keep on getting over and over again is that RE investing MUST be treated like a serious business, and not some hobby you partake in on a Saturday.

I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment. Also, does anyone have advice on what necessarily constitutes a professional RE business?

Should I form a legal entity? Get an office with office supplies? Dress up in a formal way?

Your thoughts?

You are the same age as two of my grandsons. So, I am going to give you the EXACT same advice I would give either of them if they came to me with your questions.

First and foremost, you are 15, you are a kid, you will never, ever be a kid again. Enjoy it while it lasts.

Second, rethink the college thing. There are a lot of lower cost good schools out there that could help you tremendously with your real estate investing career and give you a fallback to make ends meet while you are becoming the next Donald Trump. You can do real estate and college at the same time - I did.

Third, forget getting an outside office until you absolutely need an outside office. You can setup a space in your home, even it if is just a corner of your bedroom to start. As for distractions, you will always have to deal with those. Setting up an outside office is not going to eliminate those. It takes discipline and focus and everyone deals with that differently.

Fourth, yes, treat it like a business. What that means is everything is contained. Your wholesaling will need its own bank accounts, email addresses, etc. You have to treat the funds in the business as the businesses, not yours unless and until you actually pay yourself and the tax man. You can't have your business buy that shiny new car or whatever, and write it off. It doesn't mean you need to form a company. In fact, you should NOT form a company at this point. When you start wholesaling, focus on actually doing deals. Everything else will fall into place if you do. If you don't do deals, the perfect company, website, marketing message and everything else will all be useless to you.

Fifth, know that the actions you take now will have a lasting impact on your future. You are miles ahead of most of your friends in your thinking. But, as I said earlier, you are kid and never will be again. The last thing you want is 70 years from now to look back and think, wow, I wish I really had spent more time with my friends when I was a kid.

Sixth, don't ever let anyone kill your enthusiasm. You have the whole world in front of you and at this point in your life your choices and possibilities are infinite.

Seventh, read every business book you can get your hands on. Read "The Millionaire Next Door" and "The Millionaire Mind." Avoid the guru books out there, they will get you into trouble. One book you should read is "Dig Your Well Before You Are Thirsty." Also, anything by Larry Winget.

Eighth, if at all possible, learn to play golf. You will thank me in about 10 years. You will probably curse me until then.

Lastly, always look to expand your network of friends and acquaintances. Opportunities will open for you in unexpected and unpredictable ways through your friends, neighbors and acquaintances. The more of them you have the more opportunities you will see.

But, do always remember, you will never be 15 again. Spend at least a little time doing the things kids can do but we adults can't without accusatory glances thrown our way.