Success from anywhere – including from home

In the last months since the stay-at-home orders have been issued a bunch of my contacts and friends have asked me how my business is doing. Most people know me mainly for my consulting work and the truth is that there is no work these days and all projects have come to a stop. Some new ones that looked to be promising on the horizon about 3 weeks ago have been canceled. Bottom line – no work and most likely bankruptcy.

Yes, I know there is a stimulus program from the government but tomorrow is the thirds payroll since the lock-down started and neither any emergency funds from EIDL nor PPP loan funds have been received. No company I know can keep paying bills and employees when there are zero revenues. We use the reserves to pay obligations and then we will shut down.

On the other hand, the real estate investment company I own and through which the IDEAL Wealth GROWER system is provided is doing just fine – even without any government support.

Yes, tenants have understandable issues making rent but we planned for that. In the IWG system, we preach that each investor puts away 5% of revenues for vacancy, 5% for maintenance, and 5% for large repairs, also called CAPEX.

You might be in a little bit of a bind if you purchased your property only 6 months or less ago, but all other investors will be fine.

Another lesson learned from this crisis in this context is the fact that you are better off spreading the risk. Naturally, it is always most important to determine what your goal is. In the IWG system, we promote and help individuals who want to join me on my journey of buying and renting single-family residences, duplexes, tri-please, and maximum a 4-plex.

There are many reasons for this explained in more detail in the program and other materials you can find online. Still, with that niche of residential real estate, we could still be looking at properties in my neighborhood in San Diego county that sell for about $500K - $750K for a 3 bedroom/2 bath house. Alternatively, we can purchase properties in other locations around the country that don’t cost as much.

For a nicely renovated property in the Midwest you only need to bring $20K to the table to buy a $100K house.

What does “spreading the risk” mean? For the house in San Diego, I need to bring at least $100K to the table as a down payment. In return, I get 1 house with 1 tenant and the hope to collect about $4500/month in rent.

In the Midwest, I get 5 houses with 5 different tenants for the same down payment. In addition, each tenant only needs to pay $950/month.

Spreading the risk means that it is much more likely that my 1 tenant in San Diego will not be able to pay $4500/month if anything happens economically.

Will some of my 5 tenants in the Midwest have issues too? Sure.

Is it likely that all 5 have catastrophic issues and can’t pay all at the same time – not likely – not even during a crisis as we have it right now.

So spreading the risk and looking for properties that actually perform well is paramount for success as an IDEAL Wealth GROWER applying the IWG system.

What does that have to do with working from home? Well, when you ask yourself what you really need to do when applying the IWG system, here is a selection ( not complete):

· Have regular sessions with your IWG mentor – form home using Zoom

· Monitor your personal finances and update your “personal balance sheet” (expenses and profits) – from home using your online or mailed bank statements, utility bills, etc.

· Monitor your property management companies and any updates regarding your existing assets – using zoom for monthly check-in calls. Ask about your tenants, how they are doing and if you can do anything for them to make the crisis easier on them. Also review statements from online platforms like Buildium and AppFolio to see how your revenues and cash flow for each property and if any repairs have been requested, tasked, completed, invoiced, etc.

· Review the status of your IWG recommended investment account (savings account that you place your positive cash flow from rent into) – online or mailed bank statements

· Review changes to lending rules in preparation for your next investment. Here is a most recent article that will impact anybody who plans to take advantage of opportunities after the current crisis subsides: https://www.housingwire.com/articles/chase-now-requires-700-fico-score-20-down-payment-to-buy-a-home/ As you can see you will have to bring 20% down payment and a credit score of better than 700 going forward. That’s an online article you can either find on your own online or if you are lucky as I am, Keith Weinhold will email it to you as part of his newsletter

· In case you are getting close to an amount that will be sufficient to get ready for your next property purchase, start your research. Yes, you might have to have a better than 700 credit score but with the economic downturn, you might be able to get a property that used to cost $100K now for $80K in the Midwest. That means you only need to bring $16K to the table for the down payment and that might be close to what you had already or will soon reach. Then, sitting at home on your computer or laptop you begin looking at:

o Which turnkey provider, if any, you plan to work with – from home at your laptop

o What are the documents your preferred lender will require for you to get lending/mortgage approval for your next purchase – from home at your laptop

o Applying IDEAL Wealth GROWER rules for turnkey providers, select the one you want to use for your next purchase and identify which of the locations the TK is operating in are most appealing to you – from home at your laptop

o Based on your selected location and applying IWG rules,

                  - check for school district scores, – from home at your laptop

                  - rent levels using Rentometer, – from home at your laptop

                  - MLS listings for price comparisons, – from home at your laptop

                  - economic development, – from home at your laptop

                  - new announced investments by large employers, – from home at your laptop

                  - in-migration from other regions or states – from home at your laptop

                  - gentrification indicators – from home at your laptop

                  - Transportation plans (new highways, intestates, public transport – from                               home at your laptop

                  - Tourist attractions or cultural attractors – from home at your laptop

There are many more things you can do from home running your real estate investing business, applying IDEAL Wealth GROWER rules and guidance.

In these times I recommend increasing your frequency of sessions with your IWG mentor so you can discuss issues you face and prepare for the steps you want to take after the crisis and towards achieving your big goals.

On your path towards economic and financial independence, as you can see, there are a ton of things you can do form home and be and prepare for your success.

When travel is possible again and you have narrowed the choices for your next purchase down to 3-5 options, I still recommend going and visit the properties before you decide. Until then you can manage and increase your success working from home.

10 years ago, it would have probably been depressive to live in these time and the restrictions we all have. Now, it's actually almost a blessing to be able to plan your success with few distractions.

Be well, be healthy, be productive managing your assets and prepare to invest again as soon as your investment account allows, and the markets open for business again.

For anybody not yet familiar with the IDEAL Wealth GROWER system, please contact me for the complimentary mentoring strategy session. You can add that to the things to do form home to build your success…. Just saying …. :-)