A few weeks ago, THIS article made its way across my desk via facebook. For those of you who haven’t had a chance to read the article, the long story short is that an investor by the name of Bill McMachen purchased 627 foreclosed homes at the Macomb’s county tax sale.
The headline is what immediately caught my attention. After all, 627 units is a lot of property, especially for ONE transaction! I found myself a little envious of McMachen. To snatch up hundreds of properties for roughly $7,500 a piece is an amazing deal.
However, I’m not writing this post merely to toot Bill McMachen’s business sense. I’m writing because I wanted to shed light on the most interesting aspect of the article – the comments. You don’t have to look too far down the comment portion of the page before you read things like:
“…The only way I can condone this is if this man uses this large housing stock to return the houses to those who need them – not to benefit him, but to benefit them.”
“I was hoping the article would read that he bought these homes to help the poor, instead of helping himself to their misery. I am also disappointed, to say the least.”
“… it is disgusting that you people out there who try to take advantage of people who did not initially have things handed to them!!…”
“Just another case of GREED. He already has big bucks but wants more and more.”
“So the vultures who were planning to buy the homes of down-and-out folks, were beaten to the punch by an even bigger vulture? Hope they all go to Satan’s fiery pit on an express train.”
“Why aren’t both of these men in jail?”
What frustrated me about these various commentators is that they don’t consider the other unspoken sacrifices that may have been made to acquire the $4.72 million to purchase these properties. The article states that Mr. McMachen was a business owner of a yacht dealership and while I don’t know his story personally, I do know that many entrepreneurs endure years of long work days, personal checks written to pay staff and high periods of prolonged stress. Unfortunately, none of these commentators took these into account.
As I look at my time working in the rental business, I realized that I’ve also had naysayers and “haters” come across my path. The tricky thing is that these folks don’t typically make statements as blunt as the commentators did in the above mentioned article.
For example, I remember a recent interaction in which a relative was discussing their struggles with paying their monthly bills. I harmlessly asked if they had considered creating a budget. The response to my question was, “We’re not like you; we don’t have money just lying around.”
I think the perception is that people who are successful in real estate are plain “lucky.” While that may be true for a few, my experience has been that investors who have any type of successful track record in this business has been by design, not chance.
In a given week, I typical received 5-10 emails from new investors looking for advice or mentorship. Of these various individuals, there is always a portion of these folks who seem to be looking for a “magic bullet” or a “secret recipe” for success. The cold truth I share with them is that this business requires effort, determination and most importantly sacrifice.
Three years ago when my wife and I decided to dive into the rental property business, we agreed to do whatever necessary (within reason) in order to become financially free. To realize this goal, we sold our primary house, used the equity to purchase several lower-priced rentals, downsized into a small apartment, and cut our living expenses in order to save 50% of our income which would then be used to acquire more rentals.
An investor at my local REIA moves every two years to acquire owner-occupant financing and keep the previous home as a rental. In order to do this, he and his wife had to move to a part of town that was sixty minutes away from family and friends in an undesirable neighborhood.
Another investor in my market rents out two of the bedrooms in his and his wife’s home so they can expedite their monthly savings and roll the saved money into a down payment for a rental. I could continue with these examples, but the point in sharing this is to highlight the fact that the road to success is paved with sacrifice.
Recently, I heard an advertisement on the radio for a free investing seminar. According to the ad, the conference was going to discuss how to make “quick cash in real estate, using little to no money, in your spare time.” While this statement may be plausible, it’s also misleading. Most of the investors I know who generate “quick cash” or use “little to none of their money” have an extensive track record and have already paid their dues in this business.
Unfortunately, the idea of sacrificing for a larger aspiration isn’t a message that typically fills seats in a conference center or sells books – but it is what most successful real estate investors have done to secure their final freedom.
In today’s post, I shared a few of the sacrifices my wife and I are making to become financial free. Readers, what are a few of the sacrifices you’ve made/are making to realize your goal?
PLEASE SHARE ANY STORIES, COMMENTS OR THOUGHTS BELOW . . .