What to include when teaching your children.

Question

Hi everybody.  Thanks in advance for your help on this one.  Any ideas would help a lot.

I have a 14 and a 13 year old who are both interested in learning and beginning investing in real estate and business.  My wife and I home school our 3 sons in Pennsylvania and are very excited to start a curriculum for them on this subject.  There are a lot of GENERAL financial math courses that are out there to purchase on various sites, but I want to come up with a curriculum to teach them specifically real estate investing and have it be part of their schooling for next semester.

My goal for my 14 year old for next year is that he goes from very limited knowledge (almost none) to closing a deal on a rental at year's end.  Rather than *just* book learning, I want him to be able to end the school year having actually done it in real life while having his rental property to show for it.

I am going to be designing the entire year's schedule and curriculum throughout the next few weeks and REALLY need to pick your brains if you'd let me.  Any idea's would be very much appreciated.  PLEASE HELP!

Joel W. · Answer

I have started teaching taxes to my four boys, 1-6 yrs old. Every time we are out and they are eating or drinking something good I take a little bit and when they say "hey daddy!" I say hey gotta pay taxes! This way I get a taste and don't get fat. They still do not understand taxes, but they do understand it is someone else taking something that does not belong to them, legally.

My wife told me I needed to stop, so I told her I'm teaching them to hate paying taxes and figure out how they can pay less or none. This all is really just a way for me to get to drink chocolate milk.

Franklin Romine · Answer

Get the children hands on working with people and properties.  I take my boys everywhere with me.... Dealing with tenants, office work, bank, post office, walking properties, negotiating....

I was a CD student until college.  Once out of college not a single person or bank has ever asked to see my report card.  The only document that matters in business is your financial statement.

Frank

Carrie Giordano · Answer

@Daniel Mohnkern

Have you ever played Robert Kiyosaki's Cashflow game with them? It could be a fun way to teach them Cashflow.

Erik Nowacki · Answer

There's no shortage of subjects.  You have legal, financial, construction etc.

From a legal perspective you can start with the basics, real estate is actually a bundle of rights as to what you can do with the property.  You can go over the standard real estate contract for your state to know what's in it and how it works.  You can also try to pull some relevant cases to see what kind of disputes arise, and how they are resolved.  This "module" could also include the rules for raising money from strangers, syndications (Reg D).

From the financial side, you can analyze deals.  You can teach them wholesale, flip and buy and hold.  Then get some actual deals from the MLS and loopnet to use as case studies.  I.e. give them a current deal and ask them to look at it as a wholesale, flip or hold and figure out which method works best.  You can get financial packages for commercial real estate from loopnet.  This is also a good opportunity to teach them that the numbers you get in a sales package is not always the truth...  Finally, I would suggest a portion of economics so they are aware of the larger picture, are we in a bubble, recession, inflation etc.

On the construction side, even if you don't intend to swing a hammer, knowing building codes and best practices is always good.  At some point in time they will probably have to interact with a contractor, and knowing whether they are receiving good value for their money or being ripped off would be a valuable skill.

Great topic and I'm sure others will chime in to expand the curriculum.

Erik

Annette Gutierrez · Answer

That is wonderful that you are doing this for them. My 5 children are all grown and were home schooled also. I never even thought of doing something like that. I did however always try to encourage them to do something in Real Estate. If not their first choice to have it as a back up. Hands on is great. Them living with a Realtor Mom they learned a lot about homes and loans. I would of loved to have done something like this. 👍

Curtis Bidwell · Answer

I totally agree with @Erik Nowacki so many good ideas there.  I also had my boys read Rich Kid, Smart Kid.  We talked a lot about how money works and what things cost.  They knew how much I made and what the house cost, the mortgage payment, current value, etc... I think financial literacy and responsibility happens when they get the full picture.  They also got to know our realtor and loan brokers to understand their part in the process.

We gave our kids practical opportunities to make money and facilitated 'business opportunities', trying to say 'yes' more often than 'no'.  They did everything from paper routes, lemonade stands (for the crews resurfacing our street - grew from simply drinks to full meals with hot dogs and chips!) to bounce house rentals and full service yard care.

Today I would use the BP Analyzers to let them evaluate real deals and create different scenarios for flips, holds, renovation budgets, etc...   Couple that together with Craigslist, Realtor.com, Zillow and evaluate possibilities of purchases and current rental rates for differs homes in different neighborhoods.  Discover which areas you can find the best Purchase price to rent ratios.

Here's a basic outline we used for hands on involvement:

• Tell them: teach,  discuss, explain.
• Show them: Model as they watch.
• Involve them: Let them participate with you there, and then on their own. Give them ability-appropriate experience. 
• Evaluate them: Give feedback, as much encouragement as possible, and constructive ways to improve.

I would encourage you to keep it fun for them.  Yes, there are academic aspects that must be included but keep the end goal in mind - "getting Real Estate Rich" is a poor reason to invest.  Help them discover a bigger purpose and goal for their pursuits and it will give focus to their endeavors.

Good luck! I look forward to other's input and to hearing what you end up putting together for your curiculum.

Daniel Mohnkern · Answer

@Annette Gutierrez,  Thanks for the encouragement.  Perhaps you can make up for it with the grandchildren?

Daniel Mohnkern · Answer

@Joel W., wow, that is probably the best advice I've heard on bigger pockets. Hahaha.  I'll start teaching them all about taxes at our very next meal.  I can't wait. Maybe the next time my wife makes cookies, I'll just take a bite out of every one of them before the boys get any.  Hmm, I could get used to this.

Daniel Mohnkern · Answer

@Frank R., Excellent idea!  I should definitely be bringing them with me more often when I'm dealing with people and work with them on dealing with various situations.

My 13 year old often surprises me with his savvy negotiation tactics. He has a lot to learn but is on the right path.  My 14 year old is the one who has the most desire to do this thing and is also a little reserved, so your advice would be especially vital for him. Thank you for your good advice.

Daniel Mohnkern · Answer

@Carrie Giordano  Yes, we do!  We have a great time playing that one.  They give me a run for my money on that game, beating me to the fast track now and then.  My seven year old beat me to the fast track just yesterday, but I ended up winning my cheese first. (I put it on the seventh space from the beginning to play the odds of rolling a seven and won. Lol)

We also have the e-game so they can play against the computer.  That's a fun way to play it too.

Thanks a lot for the response!

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