BiggerPockets

I'd like to hear your thoughts on the possibility of creating a real estate lifestyle business.

By this, I mean one that really does make consistent profits, but without all the hassle of having to do everything yourself, dealing with crises and deadlines, etc...you know, 4-hour workweek kind of stuff.

I've had a lot of success from just wholesaling and cutting out the hassle of getting funds, fixing up houses, landlording, selling retail, etc, though you have to have good, consistently effective marketing methods to pull it off.

And teaching a virtual assistant to do as much as possible has been crucial in cutting down the time it takes.

Anyway, I'd like to hear your thoughts on what you would do (or I guess the least you would do) or have done to create a consistently profitable real estate business that takes just a few hours per week to run.

I would imagine automating your real estate business would not be difficult. The most time consuming part would be setting it up. Website, virtual assistants, auto responder, running ads in news papers, online classifieds (their is one site that will post to multiple sites for you) finding advertising companies that would put fliers and bandit signs up for you. These are things I plan to do in the near future and some are already in the works.

Sure its possible. Buy a NNN Walgreens for $4.5 million. 8% cap rate, and since its NNN, you get to collect that 8%. 8% of $4.5million is $360K a year. Sounds like a living to me, and then some.

Or, buy it with 33% down and get a 7% loan with 20 year amortization. You still have the $360K coming in, but have $279K in payments going out. Still, your net is $81K, which could be a living. Certainly is much better that most people in the US do. You'd be doing better than 75% of US households, according to the 2005 census.

And, that's a truly passive income. The ROI's only 5.4%, so not great, but better than CD's. You may well be able to do better with other investments. Any investment can fluctuate in returns and value.

Did you mean, can you create an active business, hire a bunch of employees (i.e., "virtual assistants") and set back while they turn the crank and generate you cash? I suppose, but I've never seen it done. Anyone I've ever dealt with who ran a business, large or small, busted their hump. I think this whole idea you can create a business, hire a bunch of staff, and just let them do the work while you scrape off the gravy is guru BS. Its intended to sell courses and bootcamps, not actually produce a living.

Now, I like some of Tim Ferriss' ideas. Can you devise a product that can be manufactured, have orders taken by someone, have the orders fulfilled by someone else, have someone handle returns, etc? Yeah, that might well be possible. Can you do that once and have a long term business? Not a chance. Tastes change. Costs change. Prices change. I can guarantee, just from watching this happen to my parents business, that if you find a profitable niche where ANY sort of business works, you WILL have competition in short order. If your employees see you're making money and not doing any work, they will, at best, duplicate your business. Or, if they have access to the cash, they will just steal. Certainly not every one, but it only takes one to bring down a small business. I've seen that happen, too.

Walgreen's is an example of a tenant that will do NNN leases in properties owned by individual, small investors. There are may others. One good thing about Walgreen's is you are pretty assured of a great location. And a long lease in some cases.

Almost any single-tenant, commercial building can work for a triple net lease, where the tenant is responsible for all maintenance, repairs, and expenses. If you like real estate investment, but not being in a real estate business, NNN properties may be the way to go.

By the way, you might be able to make good money wholesaling around here, but you couldn't do it without working hard at it. A lot of investors are scrabbling around trying to jump on the good deals, and you'd have to get up pretty early in the morning to be the one that got the contract.

None of the wholesalers that I've watched over the years ever last long. I don't know if they give up, or go on to a different field of investing after they make a nest egg. But it sure doesn't look to me like they are spending all their hours on the golf course. They are hustling and schmoozing and jumping on every opportunity the second it comes up. When I talk to them, they are obviously go-getters.

I think you guys are misunderstanding what I'm saying. For me, a lifestyle business is doing one wholesale residential deal per month. No one said anything about luxury--just replacing income.

No one said anything about not working--I got my operation to where it takes me about 30-50 minutes per day to monitor, and then I spend more hours working on writing and other businesses, but because I choose to.

And I didn;t say you can let things get sloppy and run your business into the ground. No, you have checklists for everything to make sure that best practices are implemented, and then you follow up on things daily (which doesn;t take long if your checklists and training are thorough)

It sounds like those wholesalers you know who are scrambling for contracts are all competing for the same sellers. That's a marketing issue. If they advertised to lists no one else is, they wouldn't have that problem.

And I encourage every person reading this thread to take an honest look at the very few things required to wholesale deals (3 good marketing methods, talking to sellers, screening & getting comps, making offers, finding & closing with an investor) and tell me that 80% of that couldn't be taught to an assistant, then monitor their efforts once per day.

It can happen, and it does happen. It takes work to set up, especially if you don't have the experience. But the end result is that it can be done if you make it your goal to do so.

Alan,

Im pretty sure you are describing a similar system to what we have set up here in philly. If so, I can tell you first hand that it can be done and you can definetly create a win-win for all who are involved. If you are interested in running this type of business, you are definetly gonna have to put more than 4 hours a week in, but once you have the right team in place, it can get pretty close to cruise control (mostly networking and troubleshooting). On the other hand, an investor looking to work with a company as such can easily make some decent money with minimal effort.

What we do:
We have aquisition agents and selling agents employed, a lender we are partnered with, and we own a construction company, a title company, an insurance company, and a property mgmt company. My partner is also a cpa and owns his own company w hich employs several accountants who help us as well. With these resources, on behalf of our buyers, we are able to identify great deals, garauntee construction costs, get financing if necassary, quickly get title/insurance set up and make it transactions happen. At the end, we have sales agents for flips or we use our property mgmt company to rent. We always have a few flips, hold, and turnkeys in our inventory. The only thing our buyers have to do is make their own analysis of the deals we have to offer. Once they choose a property and work with us to get the financing if necassary, we guide the process from there. We are also always willing to partner up on any of the flips we do as well. We do this to help those who may have decent credit, but not enough cash and also to show that we dont have our buyers invest in anything we wouldnt consider buying ourselves. As long as everybody involved is good at what they do, the system works well. My partner lost tons of money when he began setting this up 7 years ago, but finally created a winning team that has been together for about five years now. I would say construction is the most important part to control. This is where he lost alot of money and where I came in to the mix. You can maximize profitability by starting a company for each phase of investing like he did; however, u could minimize headachs by finding competent people who already do the work and form parnerships with them much like I did when I became a partner. You should be able to negotiate a nice cut of the profits with any company in return for the volume you bring in. When I first got involved a few years ago, I was blown away by how smooth the process works. Our buyers/investors are usually people who dont have time to figure it all out because they have a full time job or people who have tons of cash and like to play the game without too much hassle.

Not sure if thats what you were refering to....

I am a big believer in business systems that can help you define what specific results you want to achieve in your investment business.

For example, I've developed a specific set of instructions that I had off to my hired worker when I need a unit made ready. It's a step-by-step instruction set THAT MUST BE FOLLOWED.

When you find out what works and you keep repeating those steps, you begin to generate consistent results.

The real estate entrepreneur will not be 100% free of the cares that go along with running the business, but a solid set of systems will go a long way in moving him in that direction.

Hope this helps.

Good luck. You would have better chance of winning the lottery than for that to happen :mrgreen:

The closest example I know of someone who has created a 'real estate lifestyle' is John T. Reed.

His newsletter costs $125 a year and (I'm guessing) probably has at least a few thousand subscribers.

Other than that: TANSTAAFL. Translation: There Ain't No Such Thing As A Free Lunch.