Far more frequently than most think, my job is to tell a potential client they’re doin’ just fine, don’t change a thing, let’s talk in six months or so. Or, that they’re clearly not candidates for investment now, but if they rectify a few things, call me. The ones who protest though, are the ones in East Toilet Seat, Flyover Country, who sometimes won’t allow themselves to see how much better they could be doing by gettin’ outa Dodge.
Sometimes they even argue with themselves. On one hand they love being able to drive by their local income property. I get that, as most of us would prefer that scenario. All things being equal, few prefer investing in property a thousand miles away. On the other hand they complain bitterly about the bottom line performance of their beloved East Toilet Seat portfolio.
My canned response? Common Big Guy, pick one.
They tell me how trapped they feel cuz they know in their hearts their plan for retirement income isn’t panning out anywhere near what they expected. It rarely does. Yet so many of them can’t make themselves pull the trigger and move their equities to truly greener pastures.
It’s at that point I ask them one of my favorite questions.
How’s this whole local approach been workin’ out for ya lately?
They can tell I’m asking with good intent, merely pointing out what they’ve already told me in their own words. It’s ofttimes my job to act as a sorta mirror, so they can more clearly recognize the plain truth about their status quo. Yet they still feel trapped.
After years of being a part of this conversation hundreds of times, I’ve concluded that trapped feeling isn’t caused by ignorance of the poor performance and likely future of their local holdings. Instead, it’s more often than not due to feeling overwhelmed by all the information available to them these days. One 40-something single woman told me recently that it indeed was an info overload, but that wasn’t all.
It was also her lack of reliable local knowledge of a market hundreds of miles away. What was she to believe? Who was she to believe? Even if she made the right choice today, based upon empirical data, properly analyzed, what about a decade from now? Should she have chosen one of the other locations? The thought of making the wrong choice increased her feeling of being a hostage in her own hometown.
Those who’ve read me for awhile know my thoughts about Do-It-Yourselfers. At the risk of offending some, I ask this question with the best intent:
How much value do you place upon your ability to retire when you want, with how much income you need to enjoy the rest of your life?
Next month I’ll have been licensed 41 years. I’ve seen 17.5% fixed rate loans — and 4.125% too. I’ve seen an entire region’s median price spike just under 50% in one calendar year — and fall almost that much in a few years. I’ve seen real estate related laws and regulations in every flavor imaginable. There have been markets that performed like champs for over three decades — yet today I wouldn’t tell my worst enemy to invest there. Strategies that worked phenomenally well since I was a young man, are now considered by me to be financially suicidal.
If you see yourself in this post, allow me to help rid you of that trapped feeling. First understand — you’re your own jailer. The only way you’re trapped is in your mind. To be fair, it’s not all your fault. There is too much info out there. It is difficult ferreting out just who to believe. However, as you’re no doubt painfully aware, none of that changes what you know to be true:
That if you don’t change course, and sooner rather than later, your retirement, to use a real estate investment technical term, is gonna suck like a turbo charged Dyson.
So, how do you free yourself? Stop searching for the right data, the best region, the area with the most promising demographic future, and the rest of it. Instead, redirect your quest — find The Guy. True, he/she might not be found in East Toilet Seat. But they’re a lot more common than those who own portfolios like yours and still manage to end up with a decent retirement income. But, you ask, “How do I even begin the search to find them?”
There’s no single right way, that’s for certain. You may luck out and have a cousin who knows a guy, who knows a guy, etc. If not, make use of the internet. Find real estate investment pros who’re writing about what they do. Come on now, there are 300 million people in the U.S., and there’s gotta be at least a few hundred that’ll meet your needs just fine, thanks.
Here’s a caveat though. Don’t just read a couple things from one person, become wowed, and throw your lot in with ’em. Keep reminding yourself how valuable it is to you to be able to retire well — as defined by you, not anyone else. I used to say read at least 5,000 words they’ve written, but I’ve altered my thinking. I now think no less than 10,000 words is needed to property assess the professional you’ll be asking to act as a GPS, getting you where you wanna go.
They’re out there — you need only dig to find ’em. When you’ve read that much of their work, one will strike your fancy. It’s pretty hard to for them to be a poser when they’ve written at least 10,000 words on a subject. Make sense?
So there’s your Get Outa Jail card — though it’s certainly not free. It’s gonna take a solid time commitment from you. Always keep in mind that once you retire, you’ve pretty much made your bed. Spend the time, do the reading, and unlock your jail cell.
The only thing worse than that foreboding, trapped feeling, is knowing you’ve pretty much passed the chronological point of no return, and will not be retiring in the true sense of the word, but will instead be serving a life sentence — one you pronounced on yourself as both judge and jury.