If your life is anything like mine used to be – you probably know how hard it can be to build a real estate business while holding down a full-time job.
If you have a family, friends, hobbies and a life – you probably know that it can get even more complicated.
Take ME for example. Before I became a full-time real estate investor and educator, I had several things on my plate every day:
- I had a full-time, 8 – 5 job (I worked in commercial real estate banking) that consumed anywhere from 40 – 60 hours per week.
- I have a wife and two kids – each of whom requires (and fully deserves) a substantial slice of my time each day.
- Every week, I would put significant time and effort into publishing content for my blog (and a few others).
- I’m an active member of my church, neighborhood and a couple of local economic groups where I regularly participate in several extracurricular activities each year.
- I have a handful of other hobbies and fun activities that I thoroughly enjoy spending my time on (and without these things, I would probably lose my sanity).
Some days, it was totally feasible for me to keep all of these things working together in perfect harmony. Other days, it was a major challenge to keep it all straight. When one or more of these segments of my life started getting busy – life would get overwhelming very quickly.
Most successful real estate investors are familiar with this juggling act. It’s an essential first step for many of us… but how are YOU supposed to take care of all your pre-existing obligations AND carve out the time you need to run a profitable real estate investing business?
How My Time Was Spent
To start with – I thought it might be helpful to show an illustration of how my time was divided on the average week:
Depending on what projects were hot on the burner, some weeks required that I devote substantially more time to my Rental Properties (if I was buying a new one), or to my Land Business (if I had a big transaction in the works), or to my Full-Time Job (when I got slammed with a massive load of projects to work on) – but all in all, if I averaged out all of my various working activities over the course of an entire year, this was probably the most accurate representation of how my time was spent back when I had my full-time job.
And to be clear, this was my “working life” – so it excludes things like being a parent, husband, and other standard duties like cleaning the house, yard work, shopping, fixing stuff, etc.
My weekends (and some weeknights after 7 pm) were usually my most productive times of the week in terms of making progress with my various business endeavors. This time was essential to me “getting ahead” so to speak.
How My Money Was Made
Now let’s take a look at my different streams of income when I was working my 8 – 5 job. These were the ways I made money, and which streams of income were responsible for my total take-home pay each year:
Again, my global income didn’t look exactly like this every year – but for the first 5 years of running my land business, this was how the typical year looked on average.
As you compare these two pie charts together, one thing might stick out to you – the activities that put the most money into my pocket weren’t the same as what I spend the majority of my time on. For instance…
My Full-Time Job
As far as jobs go, I had a pretty good one. I was required to be present at the office for at least 40 hours each week (sometimes more, depending on my workload). My job paid me a set dollar amount, twice every month in the form of a salary. It also provided me and my family with health insurance, which helped contribute to what some people perceive as “security” (aka – a steady, predictable paycheck that we could count on – regardless of what else was happening in life). Of course, this “security” was actually more of an illusion (because I could’ve lost my job at any point in time, for any reason whatsoever) – but I must admit, it was probably the most dependable source of income I had for several years in my life.
With this source of income, it didn’t matter how busy I was, how productive I was being, or how much stress it contributed to my daily life. I was earning the same amount of money with every paycheck, regardless of how much time it consumed relative to the other slices of my weekly time budget. For obvious reasons, this kind of fixed income could work to my benefit or to my detriment.
My Land Business
The land business is a funny thing (at least, mine is). Depending on the year, I can have a few grand slam deals that generate more profit than the annual income from my job (even though it only consumed a small fraction of the time). I could also have a year with a lot of “fluff” activity and some less-than-stellar results. The month-to-month income can be very “spikey” in nature (especially if there aren’t many seller financed deals on the books), and it’s not uncommon to have some properties that take longer-than-expected to sell (which simply delays the collection of my income).
When I was still working my job, my land business provided less of a feeling of “security” – because it wasn’t easy to predict what my income would look like each month and year. However, it did (and still does) generate some HUGE influxes of cash, which played (and continues to play) a pivotal role in building my financial freedom. The only problem is, it’s not always easy to predict when these huge influxes will occur. The level of stability (or lack thereof) is also affected by how many monthly payments I’ve got coming in from the various properties I’ve sold with seller financing (and these monthly payments can add a lot of financial predictability to the revenue that comes from a land investing business).
The important thing I’ve recognized about my land business is that for me – it’s not the only income-generator I want to rely on. Some land investors choose to focus 100% of their efforts on their land flipping activity, but for me, I’ve chosen to use it a very effective tool for generating the large influxes of cash I need to pursue my end game.
And what is the end game? Well… my ultimate goal is to build a large portfolio of hands-free income-generating properties (e.g. – rental properties, farmland, self-storage facilities, and the like). These are separate real estate investments that I buy-and-hold for the long term because they will continually throw off a sustainable income for the rest of my life. Without the cash generated from flipping vacant land properties, it would be very difficult to make this kind of business a reality.
My Rental Properties
At the time of this writing, I would still consider my rental property business to be a relatively small (but growing) operation. It’s not quite enough to live off of (yet) – but the beauty of this income is that I only have to spend a couple of minutes each month running this arm of my business (as opposed to 40 hours each week in a day job).
It’s as easy as:
- Checking the monthly income report from my Property Manager.
- Verifying that the money has been deposited into my bank account.
- Making sure there are no looming problems that need to be handled.
And that’s it.
The only reason I have it this easy is simple – I have a great property manager handling all of my rental properties. In my opinion, a good property management company is an essential component of a good rental property business. With a good property manager in place, my rental properties are literally a hands-free operation that runs itself without my ongoing involvement (and this is very important).
This kind of hands-free income isn’t easy to create (especially in the beginning), but if you take the time to seek out the right rental properties and buy them the right way, you can experience this amazing phenomenon for yourself. If you ever do, you’ll see what I mean – it’s a beautiful thing!
For a project that once started as a massive time investment with absolutely no guarantee of any tangible revenue (i.e. – pretty much how every business starts), this little business has evolved from nothing into another steady stream of monthly income. It took a ridiculous amount of time and effort to map out and implement the game plan, but the plan seems to be working and it has been a fun way to generate more streams of cash flow.
The End Goal
If I had to show you how I envisioned my life panning out over the next 20 – 30 years, this is probably the best representation of how I’d like to see my global income when all is said and done:
The full-time job is gone and the other businesses are each standing on their own and throwing off more than enough cash to support all of my living expenses (and then some).
Of course, it’s impossible to know precisely how the future will pan out. There is an endless number of variables that can potentially come into play and change the trajectory of where my life is headed. However, I do believe it’s important to at least have an idea of what direction you’d like life to go… so with this in mind, this third pie chart (above) is probably the best projection I can show you.
How Is Your Time Spent?
Now that you know how I spend my time, how I make my money and what my end goals are – let’s talk about YOU.
What would your pie charts look like if you laid them out just like mine above?
Where do you spend the bulk of your time?
Where is your money coming from? More importantly, how much of that money are you investing in your financial freedom?
Do you have an end goal in mind? If so – what does it look like?
Sometimes it can be illuminating to see these things side-by-side (and I have to be honest – it was actually pretty revealing for me as I created these three pie charts for this blog post). Just take a minute and think about your daily activities… what are you doing with your life? Are you moving towards the destination you want to reach?
Of course, you won’t be able to answer these questions until you truly know what you’re trying to accomplish – so if you find it difficult to map out the same charts I’ve shown above, take a few minutes (or hours, if necessary) to organize your goals and figure out where you want to go, and what your activities are doing to bring you towards that destination.
If you’re lucky, you might just figure out some things that need to change… and better now than never.
Need Help In Your Land Business?
When you're getting started in a new business venture like buying and selling vacant land, there are a lot of things to learn about how to find deals, research properties and get them sold quickly for a profit.
A mentoring relationship isn't always necessary for everyone to get started. Some people have everything it takes to figure it out on their own. It's not a question of whether they'll succeed… it’s just a matter of how long it will take to get there.
This is where a good coach and mentor can be a game-changer because they can shave a significant amount of time off your learning curve, which can have an invaluable impact on your business and life - getting you to your financial goals much faster.
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