the-abcs-of-real-estate-investing-ken LifeFeeling

Chapter Eleven: You Own It . . . Now What?
Congratulations! You’re the proud owner of real estate investment property. After the
toasts are over and you’ve finished calling your spouse, mom, and dad to let them know the
deal has gone through, you’ll sit back, relax, and in about five minutes, you’ll probably
think . . . now what? Unless you have a plan, which of course, you do.
You may be amazed to discover that I have never purchased a single property without
going through the process described in the last chapters. To me it has just never seemed
worth the risk to rely on gut instincts alone. And I certainly do everything in my power to
not get emotionally attached to any property. In fact, I go into every property deal with the
full assumption that I won’t close the sale. That sounds pessimistic perhaps, and anyone
who knows me, knows I am an optimist through and through. So what’s with the
negativity?
I don’t really look at it as negativity. I look at my attitude as realism. No one likes to
work harder than they have to, including me. And I know through personal experience and
through the stories of hundreds of people who have shared their struggles with me at Rich
Dad Seminars, there is no fix, no repair, no advertising strategy that can mend a property
that you simply paid too much for. Even improved management practices don’t do the trick.
I hope you realize that no matter how many deals I do, I still go through the same
valuation process, the same contract process, the same due diligence process, and perhaps
most important the same property planning process. I don’t take shortcuts and, knock on
wood, I have not had one property that has not performed. Some may look at what I do and
say, “The guy must love risk.” But in truth, I don’t feel that what I do is risky at all. Doing
the homework helps create sure things. Or as close as anyone can get to sure things. It has
paid off for me.
By now you know I don’t leave much to chance, and buying an apartment building
without a solid plan of how I am going to increase income and reduce expenses to maximize
my cash flow is not going to happen. Through much of the work you will have completed
so far, you should have solid ideas in your plan for how to run your building. That’s great.
Now’s the time to put those ideas in motion. This is not a drill. I repeat. This is not a drill.
Follow Through
Follow through. Those are words that will become our mantra for this chapter, because
in the pages ahead, I’ll walk you through managing the property. Before you think that
we’ll be talking about shampooing carpets and trimming trees, let me clarify that managing
the property means following through on your property plan and staying within your
operating budget. Managing the property is about maximizing your cash flow.
At this point, you may have already decided to manage the property yourself or to hire a
professional management company. I know plenty of people in both camps and they all say
the same thing. It is simply a matter of choosing how you want to spend your time. I know
one property owner who is incredibly successful. He has vacation homes in some of the
most beautiful places on earth. He owns apartment buildings, we manage them, but he does
all his own painting. Sure it saves him a ton of money, but it’s more than that. I think it’s
being part of management that he really enjoys.