Time, Money and Simplicity

A lot of people have asked me why I decided to get into real estate. I have three criteria for when I look to invest in any business - 1) I want to make a lot of money, 2) I don't want to spend a lot of time doing that and 3) I like businesses that are very simple - something I can easily explain to my wife and parents (and that's exactly why I lost money investing in Bitcoins!! :)

So back in 2010 my wife and I had saved up some money and I was looking to invest in some income generating assets or businesses, I considered investing in franchise restaurants (very briefly). After doing some research, I realized that owning a restaurant is more or less like buying a job for yourself and I absolutely didn't want to do that. I have always been very interested in personal finance and I used to follow couple of blogs and one day someone had mentioned about a real estate investing in one of the comments to a blog and that's when I started looking into real estate investing.

It fit my criteria of making money, not taking a lot of time and my wife and parents understood what I was wanting to do. Those were the main reason why I got attracted towards rental properties over flips or wholesaling. Flipping is definitely good money, but in my opinion and experience, it takes a lot of time.

Once I figured out that I wanted to be a landlord, I started researching books and internet to learn more and that’s when I came across Millionaire Real Estate Investor book and Biggerpockets blog. Millionaire Real Estate Investor reassured me that choosing buy and hold investments over flip and wholesaling was the right thing for me and also gave me a good focus and helped me develop a strategy. Biggerpockets gave me tactics on how to implement my strategy.

One of the main reasons I like buy and hold investing is because I can systemize it very easily. For example, my team has built the business to the point where we have automated a lot of steps and have taken decisions out of wherever we can. We use the same paint color in every house we do, no exception. We use the same flooring wherever we can, same roofing, same windows, same fixtures, etc. This allows me to volume without having to spend a lot of time.

For example, I bought 4 houses couple of weeks ago and I only looked at one from inside and the rest I just saw the before pictures and videos for my records. My project manager will take care of all the rehabs and he doesn't even need to ask me about scope of work. Basically, for roof, siding, windows, furnace or other major components, we have a very simple rule. If it will need to be replaced in next 3 years, replace it now. We do new flooring and paint in every house. This helps us expedite our process. I have may be spent 2 hours per property since the purchase and project manager is taking care of rest.

For me, I have minimum rate of return that I look to make on my money and time, but rate of return on my time is much more important than rate of return on my money.