My First Quarter Earning’s & Start-up Cost

[Terry Portier]

Labor: 180-hours (15hrs/wk, $80K median household income) = ($7,200)
Labor includes reading BP(education), looking at properties, going to REI association meeting's, talking to banks, agents, internet research(home, market analysis, comps, etc)

Gas/maintenance on car: ($30/wk) = ($360) (tax write-off)

RE License: ($1000 REC fees + 70 class/etc hrs @ $40/hr) = (3,800) (1,000 write-off)

Association dues: (400) (tax write-off)

Net loss: ($11,760) (minus tax deduction)

$10,000 in labor or my time many do not account for in their profit margins. Hopefully I'll do better in the second quarter once I learn how to lean this out. Learning my market is very time consuming, along with education. I'm thinking my time will be better utilized with my RE license, and networking with local REI associations, and I am learning more about using wholesalers. Right now I still do not feel I know enough about my market or REI to risk buying my first property. I look at it as education, I spent 4 years in college and a lot of years working to make someone else big money, so we shall see I can turn that around.

I forget anything, what is your time worth? Since I do this after my 40 hr work my OT rate is actually over double $40 used and is not a tax write off.

One right deal can turn this around, one wrong deal as I have in the past and seen others do can make this worse!

[Glenn Schworm]

I have been an entrepreneur now for over 20 years. I can tell you that entrepreneurs NEVER sit down to see what their hourly rate is because it is not calculable. Let me explain. About 15 years ago I was in a very different business. I made a friend who used to ask me to come to his meetings to be a guest speaker. I did it as a favor, plus I liked it. I was never compensated for these long trips. Fast forward 10 years. I started my RE investing career and needed investors. I had not spoken to this guy in over 5 years. I sent an email, long story short, between he and his referrals, he has over $1.5M invested in our business, and that money allows us to earn a very large 6 figure income. Imagine what would have happened 10 years ago if I wanted to get paid for my time, or sat back and said, HEY! Wait a minute!! I am not earning anything per hour here! In my opinion, that is a worker mentality. If you want to be an entrepreneur, and that's exactly what a RE investor is, you need to look at the big picture and NEVER sit down to calculate your hourly wage. There is no such thing. The knowledge you learn from doing deals for nothing or even losing money is invaluable. It is better than any 4 year degree, that costs you 5 times as much! As entrepreneurs we will work 1000 hours for nothing so that one day, we can do nothing and earn the pay of 1000 hours. I hope you take this to heart as I speak from a lot of experience. It can change your life if you will change your paradigm.