Just starting out... how do you handle spouses fears?
Investor · Murfreesboro, TN · Member since 2011 · 113 posts · 16 votes
Hi Everyone,
I've been interested in real estate investing for a while now. It's taken a long time to get my credit straight and debts paid down. I'm still working on build cash reserves for down payments etc. (very low and taking forever to build) I know I can find the money as long as the deal is right and there are creative was of using what I have (ex. HELOC, turning over traditional 401k to SDIRA), but my question is how do you handle doing anything when your spouse has nothing to do with real estate, does not want to learn anything about real estate, and is fearful you will be putting the both of you into unrecoverable debt? I know this is a great time to jump in and take that risk, but I don't want to knowing my wifes fears. I know there are no guarantees in life, but I want to make her coomfortable enough that I can get started building our wealth and get her to at least comprehend what I'm doing to calm here fears. Any feedback would greatly be appreciated.
Hi- Wife here!
" It's taken a long time to get my credit straight and debts paid down. " This indicates that you may have not have been so responsible with money in the past. She may feel insecure about it still.
"HELOC, turning over traditional 401k to SDIRA" - putting the house and or retirement at risk: more insecurity
"Completely out of debt... Probably a good 5 years off." This indicates you either have a ton of debt or a small income (i'm guessing small income) more insecurity
"we're getting there but by that time it'll more than likely be too late to build the wealth I would like for us" This indicates either ignorance or impatience/immaturity on your part (don't mean it harshly). Any time is a good time for real estate!!- the real estate investor must just adjust their strategy to market reality. She must feel this too.
The best time to invest is when *you* are ready to invest.
So my advice to you, as a wife who, with my husband, went from debt/ low income to good income, no debt and re investments:
1. Be patient with your wife, and yourself. Realize there will always be opportunity. Lay off the real estate talk for a while.
2. Show Don't Tell: Work like a dog to get out of debt. Extra jobs, insane hours, serious budgeting that you both work on together every month. Maybe that second job is in a real estate field.
3. Sell her the dream: Not the real estate dream, but her dream! What does she want more than anything?- does not necessarily mean a consumer item. This goes with what Brian said, but take time to listen and find her exact needs/desires. Tell her how you want to help her realize her dreams- of security, nice house, travel, good education for the kids etc.
4. So you are now in less or no debt, your income is higher, your wife feels like she has a safety net under her, and is excited about her dreams. You have less urgency and more confidence in your voice. Real estate is a natural next step in fulfilling those dreams! Go for it!
Good Luck!!
This might help!
LOL! Oh yeah, plenty of that.
@Michael Thanks, I appreciate teh advice. I may start a thread about how to evaluate a market such as Windsor, which has a population decline, high vacancy and very low prices. I'd like to invest in duplexes with a buy and hold strategy for cash flow.
Thanks again.
Lynne, thanks for the insight. I plan on doing that just haven't had the time. I'm still going to talk to the lawyer, but mainly to help with the wifes fears since she knows the laywer I'll be talking to. The reason for the LLC is to separate assets and not expose her to any liabilty. will definately research it here before doing anything. By the way, did you have abusiness plan together when you put your LLC together. I'm curious as to how many REI have one prior to starting out and if they ever put on together? I guess thats another thing I need to research here.
Michael, Yes, we definitely had a business plan, very well researched, used the SBA template and some other online & book info and tried to make it fit what we needed, but eventually ended up with a long-term plan and short-term plan, and thought we had it all sorted out, but the market was changing drastically at the time, and instead of the 10% down investor loans you used to be able to get when we started buying again in 2008, we ended up with 20% down, then 25% down investor loans, then my husband forced to retire due to pension issues, then relocating for new employment, so we've slowed it down more than we wanted to, but the basic plan is still in place with minor revisions as we learn more and adapt. Gotta have that plan in place as it makes all your decisions easier -- does it fit our program or not? If not, pass.
Consider some other book(s) to read. Dave Ramsey is a no debt is good type, or better to say he thinks all debt is bad. The "Rich Dad" series has some books that distinguish between "bad debt" and "good debt", and those books tend to be motivational in their content. So some reading like this could help to persuade that some real estate debt may not be so bad.
@Lynn M. thanks for the direction into what you've done. After you had your plan together, is that when you started your LLC and, if you don't mind me asking, how did you fund your company to start out? What is the method you and your husband are using to invest? I really need to get my thoughts put down and layed out on paper then. I know what I want to do and have an idea of how to get there, but I need to solidify my criteria on paper.
@Steve Babiak I have both Dave Ramsey's books and Robert Kiyosaki's Rich Dad books and have read them a few times. I found my Dave Ramsey books, but the wife has been "cleaning up" around the house so who knows where the Rich Dad books are. I need to find them and re read. I believe for personal finance no debt is the best way to go, but for business related finances the Rich Dad mentality and there is good debt and bad debt philosophy is the way to go. Yet another reason to go with an LLC so everything is kept separate.
Michael, Once you start writing it, it helps clarify things. By the end of it, we had a very clear plan of type of house, exact areas, budgeting for 2 properties w/ downpayment and repairs costs per year to start, extra funds for vacancies, mortgage lenders, agents, accountants lined up, etc., Really helped as when you get down to specifics of what you want and what you want to pay, you'll find your choices are actually few, you'll have the patience to wait til one fits your model but, more importantly, the courage to jump in when you see the right fit. As far as funding, everyone is different, but once you know what you want and what you need to get it, then budget monthly into an account or research creative financing, but it is all still easier once it's part of the plan. We have a monthly amount that goes into a bank I don't have easy access to so it just builds up over time, and we don't touch that account unless we're buying real estate. Initial funding, we were selling our primary residence, anyway, in 2008, so went low down owner loan on new house and used proceeds from sale (with that great homeowner tax-free exemption) to invest, but many are underwater these days so that may not work.
Wow I have learned a lot from this interesting thread and the great and diverse responses!
I have this feeling quite a bit. My wife thinks differently from me on this topic pretty reflexively. It can frustrate me. But I also have made some less-than-great investments or had some half-baked ideas in the past. Perhaps as a unit ya'll can function well - you studying (she should see you reading a book all the time!!) and practicing, you involving her, she learning and critiquing the deal. My wife is like a bodyguard for me in real estate deals: you've got to get past her to make contact. So, though she is a bit wet behind the ears and hyper-conservative, if I can convince her about a deal then it's damn near likely to be a solid thing. If she can't be convinced, then maybe I am being emotional about a deal. It's like the D.A. vs the defense attorney: the defense tries to poke holes in the prosecutor's theories and if that can be done virtually at all, then the case doesn't have enough merit to send someone to jail. If you are going to invest money and risk getting caught with your pants down should worse come to worst, she shouldn't be able to logically, realistically, fairly punch holes in your ideas. If she can, pass on it. Wait until something is water tight and then make your move. You two will be a great pair of investors if you can do that.
Michael Pilarski My advice may look cruel to many people but here it is...
! get another wife and be done with it !
Once you reach the winners circle there will be hundreds of women who will love to be with you because everybody loves a winner.