OK, so the full title of this Podcast is "Husband, Father, Entrepreneur, Realtor... and Landlord!" - and in today's episode, I'm going to speak at little about that first aspect of the title - Husband. Or at least in so much as it relates to how my Wife and I work together to achieve our mutual financial goals.
And then that also gets into my being an Entrepreneur, Realtor... and Landlord!" - and how I wouldn't be able to do any of these things if I didn't have the full support of my Wife. Do you have your Spouses full support? Does he or she have yours?
Welcome to Episode #30 - Becoming / Being A Landlord With (Hopefully Not In Spite Of) Your Spouse
So let me start by saying that my Wife, is the Woman! I got what might be the most important decision of a person's life - RIGHT - the FIRST time (and therefore what will be the ONLY time for me)! Let me tell you... The only person who's more blessed in this 19 year marriage than me, is my Wife - because she REALLY got her spousal choice right. I mean... Come on!?
Now of course my Wife and I LOVE each other, but if I were to attempt to sum up our marriage in a single word - it would be TRUST. We TRUST each other implicitly. The amount of TRUST that my wife has placed in me over these nearly 2 decades of marriage almost verges into the level of being FAITH. Which then creates a massive responsibility on my part not to betray or even do anything to stress that FAITH she's placed in me.
I've had the full Support / Trust / Faith - whatever you want to call it - of my Wife, since nearly the very start of our relationship. She believed in, and supported me...
- When I... Would have her packing and dropping off orders for delivery related to my Online Gift Sales Business that I started in 1996 - before meeting her. It was PerfectGifts.com - which I still own that Domain Name, although the site's no longer online. Because she believed in, and supported me...
- When I... Shifted focus away from that Gift Business, over to a new Web Design & Programming Business in 1999 - just before we got married. And she believed in, and supported me...
- When I... Bought an expensive server to add Web Hosting services in 2000 with the server (unbelievably now) being in my 2nd bedroom and a raid alert siren that woke us if it went down
- When I... Quit my job in 2002 to go fully self-employed in the Web Programming and Web Hosting business (with the servers thankfully now being in a local Datacenter) - and just a few months after buying our first house
- When I... Then put that house up as collateral against a $100,000 SBA Loan to grow the Web Hosting Business, along with taking on about $200,000 of additional debt for new servers, software and other equipment the business needed.
And she supported me...
- When I... Started spending money to travel all around the country to attend various trade shows and conferences - networking and investing in my personal education and growth.
- When I... Took on a business partner who eventually became 40% owner of the company - only to later (thankfully amicably) buy him out over a 3 year period to get back to being 100% owner.
And she still supported me...
- When In.... 2009 I lost a large number of my customers who themselves were struggling in the economic state at that time - almost going out of business as a result. There are no tears from an Entrepreneur like those shed when you think the business has failed that you've put nearly a decade of effort into (blood, sweat and tears - as the saying goes).
Yet she still supported me through years more of something like 16 hour days damn near 7 days a week - well into 2011, 12, & 13. Still supported me when I'm certain I'm so close that just one more conference, trade show or seminar, one more software system, one more vendor service, one more marketing campaign, one more website improvement or one more employee - would be that solution to the multi-million dollar business I've been trying to build for over a decade.
No joke... My Wife knows how you can make a Million Dollars in gross revenue for the year - and have almost NOTHING to show for it - because you've got to re-invest in the business... don't you!?
I remember watching a Shark Tank Episode with my wife and whoever the presenter was - they had Millions in sales, but LOST money for the year and had paid themselves little to nothing. Well, my Wife had first hand experience on how that happens. It's not a good feeling and would have brought a lessor woman to a place of outward frustration, if not outright anger or resentment. But not my wife. She still supported me...
- When I tried to sell the business, with the promise of a 6-figure job at the purchasing company - but it fell through.
- And then in 2014, when my business partner buy-out was done, sales were at an all-time high, expenses were the lowest they'd ever been, debt was low, and I was able to pay myself a normalized salary with money still left over in the company - good times! I was also working fewer hours than ever before - everything was great! When I mentioned I'd like to put this money aside to start a new company - buying Rental Properties.
Yep... Just when things were going well, and we were finally starting to see the pay-off of the prior decade of effort - I decided to change industries and start doing something I've never done before. I'm going to be a Real Estate Investor and Landlord! Where's my wife in that? Right beside me, going to look at properties.
Still believing in me and fully supporting me as I...
- Give up listening to music - which I love.
- Gave up watching basketball and football - which I also love.
- Gave up listening to political talk radio and debating matters of politics with friends and family
- Gave up watching TV
- And started going to an whole new type of trade-show, seminars and conferences
... all to learn how to become and excel as a Real Estate Investor and Landlord. I was determined that this time it wouldn't take me over a decade to succeed. I would learn from my prior experiences in business (both good and bad) to accelerate my outcome as a Real Estate Investor.
All the while, there's my wife in full support. And don't get me wrong... "Full Support", and the Trust / Faith I spoke of earlier - doesn't entail her silence. She's far from silent on the actions I take and decisions made. She contributes her insight, guidance and direction - but that is far different than the barriers should could have imposed. That's what I mean by having her full support. She believes in me and that I will be successful in my endeavors and she aids however she can in that outcome. She makes it possible for me to swing for the fences with my entrepreneurial endeavors.
So as a result of the amazing support from my wife over these past 20 years... Wow, 20 years! I've managed to create an IT company at: ViUX.com (spelled V-I-U-X.com) - offering Web Hosting, Domain Names, SSL Certificates, and everything else a person or small business could need to have an awesome website. That business is going great and has been profitable for nearly the last 10 years. Its hard to know what its worth, but its not like I'm looking to sell it now anyway. And I've got some things in works for ViUX that will make it even more profitable.
But ultimately, ViUX is tech business with a small number of employees, in a world dominated by billion dollar tech companies having many tens of thousands of employees - who are almost giving away the services that I'm trying to sell. So I can't say I'll be able to continue fighting against those odds for another 10+ years - even with the amazing support from my wife. I might have to eventually let it go, so that's why I wanted to get into another business that has more certainty for the future.
And as such, since 2015, I've been able to acquire a few Million in Real Estate and thousands in monthly positive cash-flow after expenses - from the rental income. That's why I wanted to start a Real Estate Business, and that business is Blue Chariot.
And I've gotta tell you - it's pretty cool to see the payoff of our efforts and have two profitable businesses to show for it. And really, both ViUX and Blue Chariot are actually brands that represent many different areas of business, such as how Blue Chariot is Blue Chariot Properties, Blue Chariot Realty, Blue Chariot Management, and this Podcast is by Blue Chariot Media.
So these have been some of the best years of our lives, but its not like we haven't enjoyed ourselves along the way. We're just getting back from a trip to Dubai and Egypt in August, and we've taken multiple nice vacations each year since we got married. It's easier to get that spousal support if you're living a pretty good life along the way.
And I'm not saying any of this to brag... My point is that we've taken some pretty big risks. Made lots of sacrifices, but still managed to enjoy life. And now all these years later, things are starting to pay off big time. But it would not have been possible if my wife and I had not been on the same page. We tend to agree on most things, finances being a critical one - as that's what creates problems in most marriages.
So if you're entrepreneurial (or maybe that's your spouse) - start the journey on the right foot by getting on the same page with your spouse when it comes to finances. It really is easier to start a business or buy rental properties (whatever) - when you have your spouses full support and you're on the same page when it comes to finances; and other matters, like life / work balance.
Remember, I mentioned that for a span of years I was working something like 16 hour days, almost 7 days per week, often not coming to bed until something like 3 AM. There was a time that even when on vacation (like when we'd go on a cruise) - I had to go to whatever deck the Internet Cafe was on and pay per-minute to use the Internet (this being before cruise-ships had pretty-much ship wide unlimited high-speed Internet access). It was not uncommon for me to spend something like $350 just on Internet access time. How would your spouse react to not just the expense of money, but also the expense of time - when you're supposed to be on vacation?
And there were many things affected by the fact that I was self-employed. I was able to provide health insurance for myself and employees prior to 2009, but when the down-turn hit, that had to go - as did many of the employees. I Just couldn't afford it... But I was able to get my insurance coverage from my wife's job. So swinging for the fences on business risks was made easier in my case knowing that we wouldn't end up homeless if I failed. We had kept our spending and expenses in check such that even though it might not have been pretty, we could live on one salary.
Anyway, being on the same page as your spouse when it comes to finances - spending, savings, investments, bills and household expenses, food, clothing, entertainment, vacations (you name it) - it'll make your entrepreneurial endeavor go much more smoothly. And that assumes you have your spouses confidence in being able to pull it off. If not, you might want to start by addressing that first.
Now since this is the [... and Landlord!] Rental Real Estate Investing Podcast, and I'm supposed to be speaking on "Becoming / Being A Landlord With (Hopefully Not In Spite Of) Your Spouse" - let's start talking more directly to that.
If confidence is lacking - If you have a bad reputation with your spouse when it comes to business; or maybe they just don't think you're cut out for being a Landlord - start working on that first. Because they likely also have the typical fears that Tenants aren't going to pay the rent on time. That they're going to destroy the property - on top of not paying rent. That your going to have to evict them, and in between now and then, you're going to get calls at 2 AM every other night about a toilet clog or some other matter that get's you out of bed.
Trust me, my wife had all those same concerns about "Tenant Troubles", but thankfully her faith in me overcame them - at least long enough to try it out with one. And that's really all you have to do... get one, only one. And on top of that, read books, attend seminars join associations, and listen to podcasts (like this one) - to gain access to the information you need to succeed at being a Landlord. And along the way, expose your spouse to as much of it as you can.
My wife and I had fun going to look at a lot of properties together - especially once I got my Real Estate License and can enter houses on my own as we went about town. She also attended at least a couple of seminars with me, but even when I went without her, we would discuss in detail all that I had learned. All along the way, this was something we were doing together, even though directly it was my thing - we're a team!
So as early in your journey as possible, get your spouse out to as many properties as possible. Let them see first hand as you go over all the problems with the property and take notes. Then show them your estimate of the needed rehab and repairs, and run your numbers on the property, such that they can see how profitable a purchase it might prove to be - or not. As it's also a great confidence builder to see you eliminate properties from consideration that are too expensive or require too much rehab or won't earn enough rental income - or any combination of the 3 (and much more), that may or may not result in a great rental property.
Seeing you do this, along with attending some of the seminars, watching some webinars, listening to podcasts - it may all build confidence in your spouse that you are really are going to be able to make this work. And if you've failed at prior endeavors - that you are really going to be able to make it work THIS TIME. So even if you've had some past failures or not followed through to completion on some prior endeavors - you can build confidence that THIS time its real. And you may be surprised... It may not only be in your spouse in which confidence needs to be built that you can do this. You might need to convince yourself of it as well. The same process will work for both of you.
I succeed in everything I do - eventually. But until then, I fail and encounter set backs just like everyone else. My goal is to fail fast and often - so that I can get on to success as quickly as possible. If you learn from a failure that didn't kill you or cause permanent bodily harm - then it was likely a needed occurrence on the way to success.
And if you're able to get your spouse thinking along those same lines, it'll make it all that much easier for them to support your efforts. Now I came to think of failure and setbacks in this manner because to a degree its in my nature, but it really came to be my way of thinking as result of books I've read. Something about hearing a point of reasoning expressed in clear, logical and undeniable terms has a way of becoming a part of you, especially if its already there to some extent.
For example, the book [Rich Dad Poor Dad] is not really all that great of a book. But it puts into clear terms and sound reasoning something that most of us just know instinctively already - that you're not going to get rich working 40 hours per week for someone else and following conventional wisdom when it comes to matters of finance. Because if conventional financial teaching were correct, then we'd all be rich!
But you can get rich if your spouse is working that kind of job, to keep things stable in the house-hold, while you swing for the fences for both of you in an entrepreneurial endeavor, like Rental Property Investing and following a financial plan that's actually proven to create millionaires. Or, like me, you can have more than one business. If I had time, I'd start an Amazon business - because I would certainly knock that out of the park, and put every dime of it into more rental properties. When I had PerfectGifts.com all those years ago, most of my sales took place on Amazon anyway.
So now I'm a Realtor with Blue Chariot Realty and a Property Manager with Blue Chariot Management... all to make more money so that I can obtain more Rental Properties with Blue Chariot Properties. And none of it would have happened if my spouse were not in full support and on the same page as me when it comes to finances (what we spend our money on, how much, and what we don't spend it on), savings and investment, life / work balance - and all. Being in-sync with your spouse can open the door to all sorts of mutually beneficial endeavors, a great marriage, and a happy life.
And not just her... It also creates some great bonding opportunities with my son. While I don't do as much rehab work myself as I did early on, I still like to put up blinds and other minor tasks that I enjoy doing and would otherwise have to pay hundreds for someone else to do it on my behalf. So I bring my son along and give him tasks that fit with his age and size. He's helped me replace outlet covers (with the power off). He's even helped me tile a bathroom back-splash. I then occasionally hear him talking about some of the work he's done in "my dad's rental properties". I thought I was going to cry when I recently heard him say something like "if you think you can't do something then you can't do it; but if you think you can do it, then you can!" - hey I'm getting in there, I'm in there somewhere.
And how much more likely is your spouse to be in favor of something that they can see is having a positive impact on your child or children - while also building wealth and a better life for them in the process? So get your spouse excited about what you have planned for the coming year, two or three. Whatever obstacles might be in your way, a year, two or three is certainly enough time to get over them, or around them - or just push them aside long enough to squeeze through.
If credit is your challenge, you can cure that in as little as 6 months (ask me how). If you think you've not got the money to buy a rental property, maybe you don't - or maybe you do and you're just not aware of it. Believe it or not, that is possible. Or maybe you don't even need any money (or as much as you think you do) - listen to last week's episode on Lease-Options, and I'm sure I'll eventually be doing an episode on Seller-Financing.
But get your spouse excited and get them reading certain books along with you, like [Rich Dad Poor Dad], or [Secrets of the Millionaire Mind]. These and many other great books for changing mindset are listed on the Books page at: andlandlord.com/books. And if you and your spouse are not on the same page when it comes to finances, saving and investing - then you've both got to read [The Richest Man in Babylon]. It's an amazing book for changing how you handle your money.
And if getting your spouse to read a book like that would be harder than getting them to try skydiving (something I am going to try one day), then get a subscription to Audible and bookmark specific short sections, just little segments that you'd like for them to hear - and play those sections whenever you have their attention and finances or Real Estate is on your mind.
While my wife is not trying to read [Extreme Ownership] or [How To Win Friends And Influence People] - she will certainly listen to a short outtake that's relevant to something I'm trying to do; or listen to me speaking on a certain point that might relate to something that occurred in her day at work.
And whenever I'm driving, everyone in the car is listening to whatever podcast or book I'm listening to at that time - as I'm always listening to something about business, real estate or just mindset in general.
Show your spouse how serious you are about this endeavor and the changes that it will require. My wife couldn't help but to see that I was serious when I signed up for classes to get my Real Estate License. This after I had already stopped watching TV, including no more sports - which previously consumed my Sunday's and more.
I lead by example on everything I was doing, and made the information about it something that she would come to understand fully - even without her diving in head first along with me to learn it all directly for herself.
Assuming you have a spouse who thinks clearly and has reasonable judgement - how would they not be on-board with something they can clearly see you're passionate about and that they understand the power it will have to transform your financial-life for the better!?
If you said - Hey, we're going to save $20,000 over the next X years; and once we have it, we're going to use that to cover our 20% down-payment ($16,000) and closing costs ($4,000) on an $80,000 investment property purchase. I've learned how to get a lender to give us the other 80% ($64,000) of the purchase price, plus 100% of any needed rehab expense. So let's say the needed rehab is $50,000 to result in a property that's worth $180,000. We'll have $130,000 invested, but we'll create $50,000 of new value!
We then rent this house out for $1,500/mo, before starting the refi process. So we then refi the house at 75% of the new $180,000 value, taking out a new loan for $135,000. This is enough to pay off the original rehab loan of $114,000, and get back our original $20,000 investment. There's even $1,000 left over to reimburse us for interest payments on the original rehab loan prior to getting it rehabbed and rented. So then we own a cash-flow positive rental that has an infinite ROI, since we've gotten all our money back out. A perfect BRRRR deal (Buy, Rehab, Rent, Refinance, Repeat).
But even if such a property is only worth $155,000 after rehab (instead of $180,000) - and you can't get your $20,000 back out, is it really that bad? Let's say you're making $200/mo in positive cash-flow... That's $2,400 per year / $20,000 * 100 = 12% ROI. That's awesome! But what if you're making $300/mo - which is not uncommon. Well that's 18% ROI! So failure to pull off a BRRRR that returns all your initial investment means you are "punished" with a 12% or even 18% ROI. And no joke, I have returns on money I've left in properties that's 3 times that! And that doesn't even consider tax benefits, appreciation, amortization - any of the other ways you make money on rental properties.
Your spouse wouldn't be persuaded by these considerations? They wouldn't want an asset that makes them money, increases their wealth - and someone else (the Tenant) pays all the expenses? You do this once (the right way), and they'll be hooked right along with you. And if not immediately, they certainly will be once they get a tax refund check after having owed taxes in prior years.
Presentation, Execution and Proof... Handle this correctly and you can convert even the most skeptical spouse into a Real Estate Investor... and Landlord!
Real Estate Investing is a team sport, and its hard to win the game when you're not playing as a team. My teammate is my wife. So how do you get your spouse to even want to join you in this particular game of being a Rental Real Estate Investor... and Landlord?
In this episode of the [... and Landlord!] Rental Real Estate Investing Podcast, I relate how my 20 years of entrepreneurial endeavors have benefited from (and were made possible by) the unwavering support of my wife - starting before we even got married. She's been my rock, and I couldn't have done it without her - so I share some of those details.
But since I'm the one in business... I'm the one buying Rental Properties. I'm the one going to seminars, conventions and trade-shows. I'm the one reading countless books and listening to podcasts each day. So here I cover some of the things I've done to bring my wife along on this journey - fully informed and excited herself about each step along the way.
If you feel that your spouse isn't on your team (yet), when it comes to this particular game of Rental Real Estate Investing - maybe this episode will start you down that path of building confidence and interest in them as to why they've got to get into this game ASAP! Because this game can make the average person rich - and you don't have to know how to do anything with a ball or a deck of cards. All the talent you need for this can be learned. And its so much easier when your spouse is on your team and fully in the game.