Why Real Estate?

First of all, why the heck should you be listening to me? I work as a small business owner, landlord, property manager, professional wholesaler, and a licensed real estate agent in Houston, TX. I’ve been studying the different aspects of real estate off and on for over a decade. The first course I ever bought was a book and some cassette tapes by Robert Shemin back in 2001 or so when I was still a rifleman in the Army. My father had sent me a copy of Rich Dad Poor Dad and I read it on breaks between patrols while I froze my tail off in the Serbian and Macedonian mountains. In his books, Kiyosaki talks about finding “Your Why” and that finding your motivation to succeed is one of the most important aspects of success. “Why” do you want to be rich? You having a strong “why” is going to push you to succeed when times get tough… and times will get tough. Kiyosaki and his wife Kim were homeless and living out of their car for a while until he was finally able to turn things around. Well, to a 19 year old, choosing between being rich or being ordered to jump in the middle of a 1,000 year war between Ethnic Albanian Muslims and Serbian Eastern Orthodox Christians struck me as a pretty strong motivation for what I actually wanted for my life. Money was out there, and by golly, I was going to figure out how I was going to get it. So when I came back from deployment, (decorated with some shiny medals I might humbly add), I started looking around for books and courses that were going to help me get started in “money-getting”. After I got out of the Army, I continued researching stocks, bonds, mutual funds, options, gold, oil, etc. I ended up getting a degree in finance and took a job as a financial analyst in commercial real estate for a company traded on Wall St. (cell tower transactions). I climbed the corporate ladder for the better part of a decade in analysis and acquisitions (all the while keeping a toe in residential real estate).

I did well at my job but always yearned to be my own boss, sail my own ship, and not give away 90% of the value I created to shareholders. Incidentally, if you’re working a job now and reading this, you can probably relate. It’s been said that, on average, employers only pay you about 10% of the value you create in the form of a salary/commissions. This may be why there is such a big difference between the compensation of salesmen and employees engaged in actual production versus the back office and administrative staff even though both types of employees may feel that they work equally hard, if not harder. I was taught at an early age that life isn’t fair. If you want more, I believe you have to produce more. To top it off, the meager percentages you do earn as an employee are taxed anywhere from 15%-40% and up. Between the boss and government, you may get 2 weeks/year off for good behavior (vacation). Then when you get to retirement (if you survive), you get to live on a fraction of your former pay through social security and what’s left of your 401k that Wall St. hasn’t yet stolen (yet). You can enjoy your final days in the government-sponsored nursing home with Helga, who changes you once a day when she feels like it and slaps you when she’s in a bad mood. Talk about motivation. If you’re not motivated to look at other options right now, seriously, put this down and go back to reading articles about your current industry so you can be more successful in that. You’re going to need it. As far as taxes are concerned, the deck is truly stacked against the average employee and favors entrepreneurs/business owners through legal tax write-offs and loopholes. The government wants housing available for families so it is incentivized. The government wants renewable energy so it is subsidized. Why do businesses hand out coupons? Consumers respond to incentives! Let’s just say that for me, responding to the incentives offered and becoming an entrepreneur was a matter of life and death. For you, success will depend on your motivation level and how strong your “why” is. Spend some time this week defining your purpose, hug your family, and think about what’s truly important. I’ll be back soon with some more awesome informational technical tidbits on the aspects of wholesaling real estate.