All Forum Posts by: TJ Woolum

The key is formalizing the flow of monies, just like a public company would.

If the LLC borrows money against an asset, the LLC now has a pile of cash. The LLC can then chose to distribute cash back to its members. Ideally this decision is formally documented in the company minutes or wherever you maintain decisions made by the LLC. The LLC would then cut a check to its members based on the decision of its managers.

Once the cash is deposited into your personal account, you can blow it on Megamillions tickets or fancy hair products without worry.

My wife and I have weekly Friday business "meetings" at a restaurant.  Sometimes it is a very fancy restaurant.  Our W2 friends have asked us how we can expense those.  I tell them the managers of the business, us, got together and agreed it was a worthwhile business expense.  (We got that idea from Tom Wheelwright.)

Hello TJ:

Got a SFH in Decatur that we are currently rehabbing. How are your tenants? Your post says you have eight of them. Investor who bought house next door to me said he is having difficulty finding "good" tenants. Since I am rehabbing, I am not at that stage yet, but since you have 8 you probably have a lot of experience with Decatur tenants. Do they pay on time? Do they trash your properties? Are they hard to find? Do you use a property management company? Would like to connect and share notes.

@TJ Woolum Gobundance has around 900 people, and the other one (War Room) has about 200 people. Gobundance has "microtribes" people can join that have different topics, like multifamily, STR, fatherhood, buying businesses, etc. so people can connect with others that have shared goals.

I'm also in a 5 person group within gobundance called a 'gopod' and we meet weekly. We're also doing our second annual gopod trip later this year. The War room has something similar called a 'squad'. We also meet weekly to discuss our wins, challenges, etc. 

Hopefully that helps!

@TJ Woolum - save your money (many will be glad to take it), rather invest your time and energy  to connect with the right people! After over a decade of investing in Milwaukee I can confirm you have arrived at the correct consclusion. Most of us start with cheaper properties, frankly, because often it's the only option. 

But on 100 year old homes in low value neighborhoods capex often exceeds cash flow over time. I'll say that again: capex often exceeds cash flow over time. This is tough for new investors that focus so hard on cash flow as their main criteria. A more holeistic approach is needed: long term wealth is mostly created by principal pay down and appreciation. Cash flow keeps the lights on until you get there!

There is a reason why I buy properties that cost a multiple of what typical cheap rental properties are going for. I wish I could make it work with sub 100k properties, but that's usually fools gold (especially in 2023) and just not where you find long term success.

@TJ Woolum Wow what a great question. I feel your pain when it comes to the high cash flow, but low appreciation and potentially high maintenance properties. I own three in Milwaukee and they are my problem children for sure. 

I'm starting to lean towards buying B or better properties, which don't cash flow as well in the beginning, but will have better long term appreciation and attract better tenants. 

Regarding the masterminds, I'm in two and they have been hugely impactful for my growth, both as an individual and my real estate/business growth. 

One is focused on real estate and its all military folks and vets (I'm active duty Navy) and the other one is focused on being well rounded, while also building wealth and passive income. That one is called Gobundance. 

Hope that helps. Good luck!

Hey TJ,

I’ve been tempted to get a coach or join some type of group to help me think big and stay focused. Here’s a couple recommendations:

1. Brandon Turner has a mastermind group called The Better Life Tribe. He also has a new podcast that is fantastic.

2. Listen to the audiobook “The One Thing” to help prioritize your time and maximize your outcomes.

The cash flow may get wiped out but the tenants are still paying off the mortgages and rents will still continue to rise, so it’s not all bad!