All Forum Posts by: Shiloh Lundahl

@Nathan Gesner great analogy. I wholeheartedly agree. I think those that are out of the market won’t recognize the shifts nearly as quickly as those that are in the market.

I remember hearing people in 2017 and 2018 saying that they were going to wait on the sidelines until it was a good time to buy again. We all know that properties kept going up until mid 2022. Then in 2022 that said that they were going to definitely wait because it was a bad time to buy.

My question is, when is a good time to buy? And how will you recognize it? And if you recognize it is a good time to buy won’t everyone else see that it is a good time to buy too and then jump into the market and drive prices up?

@Devin James Please don’t take this the wrong way, but I wonder if this post is about looking for validation trying to justify not giving it your all for an underlying fear of not succeeding. I see this fear a lot. “I don’t want to try because I don’t want to fail.” But then masking the fear with, a moral justification of I don’t want to dedicate what is requires to _______ (fill in the blank) because it is too much of a sacrifice of time away from my family. I think it’s hogwash. Playing small won’t serve you or your family. Raising up to your full potential as a father, husband, and provider will serve those around you

Jim Rohn says it this way when he asks the question, “How tall does a tree grow?” And then he answers his own question, “As tall as it possibly can.”

In scripture the same concept is taught with the parable of the talents. One was given 1 talent, another 2, and the last was given 5. At the end of the parable each one presented what they did with the talent. The one that got 5 doubled it. The one who got 2 doubled it as well. But the one who got 1 talent hid it away because of fear of failure. He was the only one who was not a good and faithful steward. It wasn’t how much they made, it was whether or not they were good stewards over what they got. They multiplied what they received. They didn’t justify an underperformance out of fear.

So rather than looking for validation for underperforming and hiding behind the moral justification of not wanting to sacrifice the time with family that it takes to achieve _______ (whatever thing), the better question is, how can I reach my full potential as a provider while at the same time figuring out a way to meet my full potential as a husband and father and all other roles in my life. That is the burden of a man. How do I rise to my highest and best potential in every role of my life without giving into the temptation of justifying underperformance in any area of my life.

For perspective, let me share with you a real regret. I fit into what @Nathan Gesner defined as the wealthy. I wouldn’t yet fit into the ultra wealthy category. During the COVID lockdowns, I still worked. My wealth was tied up in assets and I wasn’t at a place financially to not work. So I missed out on taking a year off with my wife and kids and just fully enjoying the time we could experience together. 

Similarly, My mother-in-law went to live in assisted living homes rather than us having a guest house in the backyard of our current home where we could have hired a nurse full time to be here with her to take care of her at our home. The same thing is happening with my own mother now. I highly regret not being further ahead of where I am currently financially to where I could provide more comfort to those I care about during their vulnerable times in their life.

You see, wealth is not just about you. Wealth is about those you care about.  It’s more about duty than desire.

Please don’t take offense to anything I have said. What was described may not fit your situation at all. If it does, then it may be worth reflecting upon.

Hey @Dave Allen I agree with @Jonathan Greene. It's best to start with a goal.  Think of it like the idea of wanting to go on Vacation and asking a group of a million people where you should go. Tons of people would be willing to tell you where you should go, possibly because they have had a great experience there themselves. They could tell you the Swiss alps, New York, Australia, Japan, or my favorite, Costa Rica. However, without more information on what your preferences are, it is difficult to give you good advice. Here are some things to consider when wanting to invest your money. And you may not know the answers right now because you may not have much experience with each different option; and that is okay. You can change your mind on what you would like to do as you get more experience. 

1. Do you want to be more of a passive investor or active investor or somewhere in the middle?

2. Would you like to manage the property yourself, have an assistant do it for you, or have a management company do it for you?

3. Do you want to own the asset yourself or would you like to be partners with someone else who may have more experience and you could be the money partner? Or do you want to be a part owner with a group of people like in a fund or syndication?

4. Do you want an investment that you can use yourself such as a short-term rental in an area you like to vacation in, or does it matter which type of asset it is?

5. Is your highest priority immediate cash flow or would you rather have an investment that may give you a greater return but it may take a couple of years?

6. Is cash flow the most important or is equity growth more important to you?

7. Do you want something close to you that you can go look at for yourself or are you okay with investing in something far away that you would probably have to fly to if you wanted to take a look at it in person?

These are just some questions. And you may not know the answers to all of them right now and that is completely fine. You may just want to jump in and get started and learn along the way and figure out what you like over time. That is fine too.  If that is the case, I would encourage you to intentionally start making connections with successful real estate investors. Then, over time, probably a few months, start to determine who you would feel comfortable doing a deal with. Make sure it would be someone you could learn from in the deal and then I would encourage you to only use a portion (probably only 50k to 100k) of your available capital in the deal.  This can help you gain experience and start to network and develop a team of people who can help you invest in future deals.  

Hopefully this gives you some ideas that you can use as you decide how you would like to redeploy the money that you referenced above.  

Good luck to you.

@Kyle Kline your post exposes your problem. You have a concept (investing in real estate), but you don’t have a specific plan. 

In other words. Like Covey wrote, begin with the end in mind. What do you want real estate to do for you? Once you are certain about that, then you can create the plan to get there.

Let me give you an example. My goal is to get to 50k per month in net income from our businesses. We had a large portfolio and have sold a lot of it. Currently we have about 50 single family homes with about 35% equity. We also have some mobile home parks that we are selling and we have some luxury short term rentals. We don’t get cash flow from our real estate right now. But for the most part it sustains itself. Over the next 3 - 5 years I plan to 1031 exchange all of our single family homes and purchase another 40 that won’t have mortgages (we use the lease option model to sell our properties to maximize profits so we cycle through properties every 3-5 years). I will be also partnering with other investors to purchase another 40 properties where we will split the profits. So with 40 paid off properties and another 40 properties with partners and the other businesses that we own we I should meet that cash flow goal. 

So Kyle, I would encourage you to figure out what you want your real estate to do for you and then work backwards. 

This is the forever debate... are gurus worth the money or not?  A guru is just a coach that wants to scale.  And isn't that what we are encouraged to do by tons of business books and courses created by the wealthy?  They tell us that rather than trading time for money, figure out a way to multiply yourself so you can do more with less.  Gurus do this.  They take the success that have had (and I am only referring to people who have actually had success, I am not referring to scam artists that pretend to have had success but who have never actually had success) and they figure out a way to present the information in a way where they themselves don't need to teach it on a one on one basis.  They do this through books, programs, videos, audios, employees that do the fulfillment of the programs, etc.  

Using leverage such as the things described above help coaches scale their business.  The problem, however, is that the further that the coach gets from the student, the more the program gets diluted or watered down.  This lessens the success of the whole group.  Whereas if a great coach were to work with 100 highly motivated students one on one and was able to help them learn how to do deals in a very personal way, the student's success rate may be in the 90's.  But that type of coaching and hand holding may take a ton of time and the number of students would be limited to the amount of time that the coach was able to provide to them.  If the coach wanted to provide the coaching to 1000 or 10,000 people the one on one coaching model would not work.  Other people would need to be employed to help the coach scale the coaching business.  

So let's say 90 out of 100 highly motivated people could be successful with one on one coaching.  Lets say that their coaching was for a year and it cost them $10,000 and the average student bought 2 homes in the year and gained an increase in equity by $80,000 and they felt that they were confident in finding and purchasing good deals after the year was over.  Would that be an example of a "guru" taking advantage of people? I think most people would agree that the results would lead people to say "no."  Well, what if the program was dropped from $10,000 to $2,000 but the entire guru coarse was through videos and online learning and it dropped the overall success rate to only 50% of the people buying only 1 house gaining only $40,000 in equity on that one house and after the course they felt somewhat confident that they could duplicate the process after the year was over.  Which situation is better?  

The $10,000 course helped 90% of the students feel more confident and they gained $80,000 in equity by the time the year was over while the $2000 course only helped 50% gain $40,000 in equity but limited the loss to only $2000 if they didn't do anything with it.  The coach would have made $1,000,000 that year through coaching by helping 90 students buy 180 properties gaining a total of $7,200,000 collectively through one on one coaching.  And it probably took him 25 hours a week (100 half hour phone calls every 2 weeks) for one coaching and another 5-10 hours a week in preparation and content creation and 10 to 20 weekends throughout the year presenting at conferences to get students to coach.  That is a lot of money but it is also a lot of time.

Now let's say that rather than providing one on one coaching, the coach becomes a guru and try to leverage his time by producing content.  The content takes him 4 months to write, edit, record, edit again, and then to produce and it costs the guru $200,000 to create and make accessible.  So now the guru is able to sell the course for $2000 a person and sells it to 1000 the first year.  The one on one coaching has gone away but the the guru still needs to create content and go to conferences, etc. The total the students gain from the guru switching to the guru model is $20,000,000 collectively and the guru nets $1,800,000 for the year and gains a lot of time back.  

So tell me which of the 2 models, the coaching model or the guru model is better?  You could also say none of them because to pay for learning is beneath you and you are too good for any of this nonsense.  And you learned that in college, which cost you $50,000 - $100,000 which helped you get a job making $50,000 to $100,000 a year after 4 years.  

I wish people could pause and listen to how foolish they sound sometimes when they have strong opinions about how somethings are so wrong on the one hand, but then on the other hand, they do the same thing only in a slightly different way.

@Autumn Cain thanks for your reply. And I think there’s a lot of wisdom in that. 

For me, I have a finite number of hours that I can devote to creating an income for my family. I’m a very busy person with a lot of businesses and tasks that need to be done. Anytime I take on one task it takes away from my time at a different task.  so even though I enjoy coaching, I can only justify doing it if the income from the coaching justifies hiring someone else to do another one of my responsibilities. I’m not at a place where I can altruistically give my time without trading it for income.

Let me give a brief background for the context of my question.

I’ve been investing in real estate for the last 14 years but more actively for the last eight years. During that time, I built up a portfolio of 250 doors with a business partner. This portfolio consisted of around 80 single-family homes, some mobile home parks, a commercial building, some multifamily, and some luxury short-term rentals.

I started getting a lot of people reaching out to me and asking me questions about real estate and if I would help them learn how to invest. In 2018 and 2019 I started coaching people on how to invest in real estate. The way that I set up my coaching program helped around 80 to 90% of my coaching students buy real estate and increase their net worth by between $30,000 and $500,000 during the year that I coached them.

I tried to make the coaching program really affordable and based on psychological principles of motivation. The way I set up the program was that I would have the coaching student pay me $5200 upfront for a year-long coaching program of 26 phone calls every other week. I would give them homework to complete in between the phone calls and if they completed the homework they could earn back half of their coaching fee, making the coaching program only $2500. Then after doing that for a while, I raised the fee to $10,000 with the ability to earn back $5000 of the coaching program if they completed all of the homework assignments.

Coaching real estate has just been a side gig that I’ve done for the last couple of years and I’ve had anywhere between one and five coaching students at a time, but I’ve helped over a dozen people increase the net worth substantially during the year that I coached them

So here’s the question: One of my mentors recently shared with me that I am selling myself short as a coach and that in addition to charging the upfront fee, I should also write into the coaching agreement that I get an equity steak in the deals that I help my coaching students get during the year that I coach them. It would be a partnership agreement on their deals where I would get paid out 25% of the profits at the time of sale or refinance.

I have never set up a deal when I would get some of the equity of my student’s deals before and I’ve helped several of my  students increase their wealth over $100,000 during the time that I coached them. Do you think that creating an agreement where I would gain 25% of the profit of the deals would make people not want to get coaching from me or do you think that they would still want to get coaching because of the value they get from learning how to build wealth in real estate? 

Depending on the market and depending on your experience, I would say $20,000-$40,000 is sufficient to start.