Reflective Pause

I enjoy Real Estate investing - the hunt, the growing of wealth, the opportunities to create passive income. I can hardly wait to enjoy our financial freedom!

Our summer yielded many learning experiences:

• ALWAYS GET A SECOND OPINION - learning the hard way seems to be our forte. We attempted to privately sell our subdivided duplex (both sides), and our realtor of 2 years told us what price we could expect. She also advised us on what kind of rent we could expect. Little did we know those numbers were too high. The duplex was empty for 2 months (one month on each side) until we reduced the asking rent. Any interest expressed in purchasing the property fizzled instantly when we told people our asking price. In fall, at the end of our patience, we decided to list with the realtor who exclaimed that our prices were 'way too high!'. Hmm. We'll be switching agents.
• TENANTS ARE PEOPLE - this one is personally embarassing for me to admit, but it's important to talk about. Naturally, I'm all business. I easily make decisions and prefer to get to the point. I viewed our tenants as the source of our funds. They were simply numbers. Real Estate is a people business though, and I'm thankful I've had the summer to learn how to mix relationships and business. I'm anything but proficient at it, but I'm learning that tenants are people. It's an interesting mix for me. I'm learning to listen, understand, and have compassion for our tenants. They are people in my life who my words and actions impact. I think this realization has made me a better landlord, business person, and human.
• BACK UP FUNDS ARE PARAMOUNT!! - Thankfully we're not learning this one as a result of being destitute and facing bankruptcy, but I can see how that would easily happen. We conitinue to gain more access to funds for back up capital, and it's a good thing we have. Our first purchase was intended as a flip. (it doesn't cashflow, but profit on a flip is expected to be good) That was almost a year ago. We're hoping to sell in the spring. In the meantime, legal fees, subdivision costs, property upgrades, vacancy and maintenance are all costs we've had to cover. If we didn't have the back up capital we would have been desperate sellers, and would have had to face damaged credit, selling while still having debt, and who knows what else. Our second purchase is one we intend to move into in the spring (it is currently rented but doesn't cashflow), so maintenance of that property is another cost we must bear until then. We're not alone. These are common in real estate investing - make sure you have back up funds!

Those have been the biggest things I've learned through Real Estate investing this summer. We continue to work on our primary residence, renovating in time for a spring sale. Our plan is to have 3 of the 5 doors for sale in spring, and we'll move into one of the remaining 2 doors. That should clean up debt, increase personal cashflow, and provide some extra funding for future endeavors. I'm adept at counting our chickens before they've hatched, so we'll see what actually happens. Those are simply the plans we've laid out.