Month: April 2021

My Real Estate Journey Pt.2 (2010-2016)

Published by on April 28, 2021

Part 1 of this series chronicled the beginning of my real estate journey. It was marked by excitement and naiveté, and as you’ll see in this post, it just about did me in. As I mentioned at the end of that post, my business partner ended up moving out of state, and I was left with an unfinished house and an inherited crew that wasn’t doing what needed to be done. And to top it off, I really didn’t know what in the heck I was doing. To say I was scared was a major understatement.

When I first started writing this post I quickly moved on to the good portion of this time period. I mentioned in the last post about being an Enneagram 7. One of the things you should know about Enneagram 7’s is that we have a need to avoid pain. I recognize that I was doing just that as I wrote the first draft of this post. The truth is that this was one of the most painful couple of years of my life. I was in the deep end of the pool, and I didn’t know how to swim.

So as an exercise in growth, let me back up and share more of this story.

My business partner and I had purchased this home on Evelyn Ave in Cooper-Young the summer of 2009. We had big plans for it, but it just dragged on and on, and as I mentioned earlier, when the economy got really bad he was over-leveraged and ended up moving. We had borrowed the money from my parents, and all of it was gone. I ended up going back to them to borrow more, and I set out to finish the house. By the time it was finished it was the summer of 2011. The good news was that the business partner was fully out of the picture and I owned the house 100%. The bad news was that I couldn’t sell it. By this point I had my real estate license (more on that back story in a bit), and so I put it on the market for $133k. It sat for 6 months. I took it off the market, then a few months later put it back on for $118k. Another 6 months came and went without so much as an offer. What was I going to do now?

The worst part of all of this is that I had made promises to Mandy that I now couldn’t deliver on. Selling this house was going to mean that she could stay home with our kids. I kept thinking I could turn things around, but it just got worse and worse. She had never felt good about the partnership I was in, but I didn’t listen. She ended up having to go back to work for a year, unfortunately at a really tough school. It was one of the hardest seasons for our marriage.

I ended up getting the house rented, and from the very beginning it cash flowed quite well. I can look back on it now and see that holding on to it was one of the best decisions I made, as it’s now worth close to $200k. Even after the house was finished and I had it rented, there were some long-term effects. I remember that every time I drove past Home Depot, I felt a little sick. It also took time, counseling, and a lot of work for Mandy and I get to a good place.

The word “work” is a good word to use here. I worked hard. Not always smart, but definitely hard. I learned a lot during this time. More than anything, my faith grew because I was forced to depend on God to help me. As hard as it was, I can look back on it and say that I grew, and that I am better as a result.

Now lest you think that this entire period of time was terrible, let me share some happy things! One day in early 2010 my friend Josh introduced me to his friend Rob. Josh knew that both of us had an interest in real estate, and he thought we should meet. I’m sure glad we did. Soon afterwards I started working for Rob. He was trying to buy foreclosures, and I was getting good at researching and finding deals. One lovely spring day he asked me if I had considered getting my real estate license. I told him I hadn’t given it much thought. So I started thinking about it, and by the end of the summer I had gone to class and passed my exam.

During those first few years being an agent I wrote so many offers for Rob that I got pretty good at it. During all of this time I was also the pastor of a young church, so there was a limited amount of time I had for my new business. Slowly but surely, though, I began building my list of clients.

At the end of 2013 Mandy and I made one of the best financial decisions we’ve ever made. We bought a new house. But more than that, we decided to keep our first house as a rental. I always tell people interested in getting started with real estate investing that the best way to do it is to turn your current home into a rental. This was a game changer for us.

So going into 2016 I now had five rentals and a growing business. I had gotten through the global recession, and things were looking up. One day in early 2016 I started researching a house on my block that had been vacant for awhile. I figured out who owned it and found an email address. I emailed him and asked if he’d be interested in selling it. The next day he emailed back and said he would. I was kind of surprised. So I talked with Rob, and we decided to buy it together. This would be the first of twenty projects we would do together.

The final post in this series will be how things have grown and changed in these last few years.

My Real Estate Journey Pt. 1 (2004-2010)

Published by on April 21, 2021

Real estate has played a big role in my life over the past 17 years. I thought I would share some of the story that got me to where I am today.

In 2004 Mandy and I lived in the San Francisco Bay Area. I had graduated from seminary the year before, and we had moved just outside Oakland so that we could be closer to the school where Mandy taught. We had been told by several people that if we were going to put down roots here, we needed to buy a house. So we began looking. Our good friends Ryan and Marian were told the same thing, and being that we were looking for intentional ways to practice community together, we decided that we should buy something together.

After looking at several properties together, one Sunday afternoon we went to the island of Alameda for an open house at a duplex. That thing was so tiny, but we decided to put on our big boy britches and make an offer. If I remember correctly, our offer was around $30k over list, and the sellers still countered us another $30k. We walked away sadly. Side note: that place wouldn’t have worked for very long, as we soon had two kids and they had four!

After that Mandy and I felt that perhaps the timing wasn’t right to buy. But now we had to decide what to do with the rather large amount of money that we had set aside as a down payment. I decided to talk to my friend Dax about it. He now had three rental properties in our hometown, and after talking for awhile he asked if I’d like to buy 50% of those properties and go in as partners. After a week or so of thinking about it, we said yes.

At that point I felt like it could be a good thing to continue to rent in the bay area but to own real estate in Tennessee. Here’s what the numbers looked like. We were renting a 2BR/1BA home just outside of Oakland for $1450/month that would have cost us over $400,000 were we to buy it. In my hometown, we were getting around $850/month for homes that cost $100,000. Big difference.

Things changed for us less than two years later when we decided to move to Memphis. Adam had been born six months earlier, and we decided it was time to come closer to home. We wanted to be closer to family, and we wanted to start a church.

During those next few years I learned more and more about real estate. I wanted to own more properties but I wasn’t sure how to go about getting started. One day in 2008 I met with a local investor named Joe over coffee to learn more. He and I were both board members of our neighborhood association. He had been flipping quite a few properties in our neighborhood. I told him that I had seen some white stickers on a house on my street, and he said we should go check it out. We got there, he looked at the sticker, and then he took out his phone and dialed a number. Next thing I knew we were buying the property together. I had no idea what I was doing, but I’m an Enneagram Seven so it was no problem! One week later he said that he was going to need to get another investor involved, and he asked if he could buy me out. I asked how much and he said $7000. I said YES!

You can probably imagine that at that point I was pretty much hooked. Over the next year he and I bought two properties together. The problem was that now it was 2009, and things with the economy were about to get rough. Joe ended up moving before we finished the last one, and I was stuck figuring out how to get out of the mess I was in. It was one of most difficult times of my life, but I grew a ton. Fast forward a decade and that house is one of my best rentals.

That’s all for this phase of my journey. Next week I’ll share part 2, which deals with the years 2010-2016. Spoiler alert: it was quite the bumpy road.

Savings vs. Profit

Published by on April 19, 2021

I just finished listening to JD Roth’s Audible Original How to Achieve Financial Independence and Retire Early. There wasn’t a ton of new material for me, but I still found it a great resource, and one that I would recommend if you’d like to learn more about the subject.

There was one part, though, that, while simple, was something I had never given any thought to before. He said that most folks don’t get that excited about talking about saving money. He thinks it would be better if we treated this topic like businesses do. They don’t call it savings. They call it profit. Income minus expenses in a business is profit. Profit allows you to grow and expand. It’s actually tied to growth.

Why don’t we feel the same about our personal finances? Income minus expenses equals savings, but it’s normally haphazard: If there’s any money left at the end of the month, I guess it’s savings! But what would a shift in our thinking produce? If we saw it as profit, would we be more excited about it? Would we see it as a sign of growth? As something to be celebrated? Something to think about.

10 Rules for Life & Happiness

Published by on April 14, 2021

Awhile back I read a tweet from Ramit Sethi about his ten rules for money. As I read it I began thinking about my own ten rules, not just for money but for life and happiness. As I reflected on this, I thought about things that have remained important to me over my life, but I also began to think in terms of the most important things that I want to share with my sons. For the past few weeks I’ve been working on this list, and I thought I would share my rules here.

Before I begin, a word about rules…we normally don’t like rules because rules are something that others give to us. I’m thinking of parents, teachers and bosses here. Try not to think about the word this way. As I’ve researched it, I’ve discovered that the word “rule” comes from the Greek word for “trellis.” A trellis allows a grapevine to get off the ground and grow upward, thereby enabling it to thrive. We need the same thing in our lives.

Rule #1: Put your trust in God.
I consider this to be the foundation of my life. God doesn’t call me to know everything or to get everything right. God invites me to place my trust in him; to walk with him and be guided by him; to be with him when times are good as well as when they are bad. When I look back on my life, on those times when things were most challenging, I see that God was with me. I have a lot of questions when it comes to faith and spirituality. I am a skeptic at heart who continues to wrestle with certain topics. But through the wrestling, I always come back to this fact: that no matter what I go through, I can come to God for help. One of my favorite passages of Scripture is Deuteronomy 31: 8. It says, “The Lord himself goes before you and will be with you; he will never leave you nor forsake you. Do not be afraid; do not be discouraged.” If there was just one thing that I could pass on to Adam and Micah, it would be this truth.

Rule #2: Decide which worldview that you will give yourself to.
As much as I believe the previous rule, I recognize that not everyone will feel the same way. And therefore, everyone has to decide for themselves which worldview out there to give themselves to. As Bob Dylan once said, we all gotta serve somebody. We may believe that we’re calling the shots, but everyday we give ourselves to other people, things, causes, etc. It’s the way that we’re wired as humans. The key is to make sure that you’re giving yourself to the right things. If you’ve never listened to David Foster Wallace’s 2005 commencement speech at Kenyon College, I highly recommend it . You can listen to it at this link, and if you don’t want to listen to the entire thing, just start around the 17 minute mark.

I’ve come to the place where I believe that the best worldview that I can give myself to is Jesus and the Kingdom of God. So many people have baggage over what they think this implies, so I’ve pretty much come to the conclusion that there’s not much that I can do to convince a person that this might be the best worldview for them. Instead, I live my life in a way that allows this worldview to influence me more everyday. I’ve shared more thoughts on this here.

Rule #3: Don’t be afraid to ask for help.
I have always struggled with this, and I still have a long way to go. Asking for help signifies weakness, and I imagine most of us don’t like feeling weak. That has definitely played a role for me, but it was also about believing a lie that I was bothering people when asking for help. I’ve had to make a real effort to fight this lie.

When I think about this rule, I think in terms of everyday friendship, but I also think about the need for professional help. Mandy and I have been seeing the same therapist for over a decade, and I can’t begin to comprehend where our marriage would be without this. Sometimes a book, podcast, or conversation over coffee can give me what I need, but at other times I need something more. A friend of mine would often say that healthy people ask for what they need. I’ve learned this to be true.

Rule #4: Cultivate friendship
It’s good to have friends who can talk about sports and the weather and what you did last weekend. We all have those kinds of friends. What we need in addition to this are friends you can go deep with; friends who will on the one hand accept you as you are, yet on the other hand not be afraid to ask you the hard questions. Friendships like these are rare, and when you find one, don’t be passive. Invest time and energy, and don’t take it for granted.

Rule #5: Your interior life matters more than you know.
Proverbs 4:23 says, “Above all else, guard your heart, for everything you do flows from it.” Much of life is all about what’s going on in the exterior of our lives. But it’s so important to take note of what’s going on within. When I think about this rule I think about character. I’ve heard character defined as “who you are when no one is looking.” While that is a part of a good definition of character, I feel like it falls a bit short. It focuses on the negative. It’s all about not sinning.

Dallas Willard, one of my favorite authors, says that character is what you do without thinking about it. You can have good character or bad character. We develop good character when we make good decisions; decisions that look to the good of others over ourselves. We also develop good character when we fail but then learn from our failure. Finally, just as a body grows healthy when more good things than bad are put into it, our hearts grow more healthy (and our character grows) when more good things than bad are put into it. As we cultivate our heart, we develop character, and character then automatically influences our actions.

Rule #6: Understand what fills your tank, and make no apologies for spending time doing those things.
So much of life is depleting. It’s important to know what things you can do that restore your soul. For me, it’s things like travel, hiking, biking, cooking, listening to good music, and reading a good book. I know it’s important to prioritize these kinds of activities into my schedule. In the past, when I have found myself getting burned out, I’ve often been able to point to the fact that I’ve been too busy to do these things, which is in fact a lie that we often believe. If these things fill my tank, then I need to prioritize them. I need to put them in my schedule just like I do a meeting for work. The first thing is to figure out what those activities are, as they’re different for every person. And then do them!

Rule #7: You will have fewer financial emergencies when you have money in the bank.
I learned this from Dave Ramsey, and I’m so glad that I learned it when I did. Most people spend every dollar they make. They have no financial margin, and so when an emergency happens, which it will, it can be devastating. When you have an emergency fund, you know that it’s only a matter of time before an emergency is going to happen, and you also know that when it happens, while you certainly won’t enjoy writing that check, you know you’re going to be ok because you have the money set aside. The emergency then doesn’t feel like such an emergency!

Rule #8: Never stop learning and growing.
Another way of saying this is, don’t forget to invest in yourself. Education doesn’t end when you graduate from college. Continue to read books, listen to podcasts, go to conferences, and learn from others. More than that, though, decide what you’d like to learn, and then set up goals for how you are you going to learn it. Find a topic that you’re interested in and go learn about it. There is more information and opportunities for learning than ever before, and it’s only going to increase. But you have to determine that you are not going to be satisfied with where you currently are.

Rule #9: Marry the right person.
I’ll admit that I’m being a bit sneaky with this one. The truth is that this is a tough challenge. How in the world can you know on the front end who is going to be a good fit for a life partner? Mandy and I are nothing close to the college kids we were when we met. But as we’ve grown and changed, we’ve done so together. At the end of the day, rule #1 (trust God) leads me to believe that there is some providence at work with something as important as marriage. But you have a role to play as well. As you date, think about the obvious things like friendship, attraction, and fun, but also think about common goals and vision. Have those kinds of conversations. I know that Mandy and I did. And as a word of caution, be careful about giving your heart away too soon.

Rule #10: Pursue Wisdom
This seems a fitting way to end this list of ten rules. At the end of the day, I want my life to be characterized by wisdom. Eugene Petersen says that wisdom is the art of living skillfully in whatever actual conditions we find ourselves. It’s an art rather than science, and it’s very practical. The book of Proverbs paints this picture of wisdom as someone offering to be your friend as you make decisions, navigate relationships, steer clear of temptations, and simply seek to be successful in life. I don’t know about you, but this seems like a good friend to do life with. There’s no money you have to pay and no test you have to pass to get this kind of friend. You just have to want it. You have to pursue it.

This was a great exercise for me, and I highly recommend it to others. It took awhile to settle on these ten, and a year from now I might organize them a bit differently. But I feel good about this list. These are things that have mattered to me for a long time. I’m not positive how or when I’m going to share these with my sons, but I’m definitely looking forward to figuring that out!