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The tragedy of the temporary real estate investor
One of the worst things I see on a regular basis in my 20 years of real estate sales is what I call the cycle, says broker Rhys Wyn Trenhaile of The Vanguard Team at Manor Realty Ltd.
Let’s say you’re a young man or woman, full of piss and vinegar, ready to change the world.
You take a huge risk and cut grass for two summers straight and save up your money and buy your first income property.
Maybe you even live in it. Learning, failing, sacrificing, but making it.
Trenhaile claims it is a hell of an accomplishment and is impressed how many people are able to do it at a young age.
“Then you get excited and make more money, your property value goes up, you refinance, cobble all that money together and you buy your second income property,” says Trenhaile. “Then you do the same thing again and you fight, and claw and you get that third income property. Amazing!”
So, what’s the tragedy? Life continues to happen.
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Suddenly you’re in your mid to late 20s, maybe even your 30s, you meet the woman or man of your dreams, get married, maintain a thriving career, all while putting in 70 plus hours to manage your properties.
The next thing you know, start having kids and there are screaming babies everywhere.
But this is what you wanted right?
Suddenly, you’re no longer that single person who had time and energy to manage everything, so you call your broker and tell them to sell all your income properties.
“It’s the worst call I ever get in this business,” says Trenhaile. Truly, because you’ve done all this hard work to learn the keys to how 80% of the world’s wealthy get wealthy, through real estate investment, and you’re giving it all up.
“You started with no income properties, and you end up with no income properties. I’m here to tell you to be aware of this and that you can break that cycle by following this very important step. When you get up to two or three income properties, you now need to plan to sell them to buy a bigger property, and make this what it is supposed to be, passive income.
Eventually you can work up to investing in a commercial plaza or an apartment building with 10 units or more.
“Now able to get the best property management possible,” says Trenhaile.
“Notice I didn’t say the best property manager possible,” he adds.
This means you can have the best property manager possible, but if your properties are small, you might not get the same service you need.
“So, break the cycle. Take your smaller income properties, and as your life gets busier you sell them, buy the 10-unit building and you get the right property manager. This way all the knowledge and hard work will continue to provide passive income which will serve your family for years to come.”
For more information on how to structure this part of the game plan so you can grow your passive income stream instead of selling off your dreams of wealth, contact email@example.com or visit www.thevanguardteam.com.
If you want to avoid accidentally becoming a temporary real estate investor due to poor financing, click the link below to book a free strategy call and turn your life as a temporary real estate investment into a long-lasting success story instead.