EP 263 – Finding Balance Between Your Job And Your Passion

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NCS 263 | Finding Balance

NCS 263 | Finding Balance

A lot of people love their jobs, while others not so much. Whether you do or you don’t, having income from different sources starts to add up. Whether it’s for boosting your retirement or it’s directly correlated to your current job. Finding balance between your job and your passion is always a challenge, more so if your side job is closing notes. To separate your job and passion, the best thing you can do is focus on the hours that are available for you to do your main job and your side job. Create an action plan that will help you transition from one task to another as smooth as possible.

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Finding Balance Between Your Job And Your Passion

This episode’s topic deals with a lot that some people struggle with. It’s more so the part-time investor that struggles with the balancing act that a lot of entrepreneurs deal with or budding entrepreneurs who are looking to either leave their job, leave their career to be a full-time real estate investor. I’m not talking about people that work an hourly job who can come and go, their bosses don’t really care. I’m talking about the people that have remained full-blown careers. They have a job, they’ve got a title at a company, and specifically, their boss is probably not happy or does not want them doing something outside of their own job. They don’t want them moonlighting.

We have had quite a few people that come to our trainings and come to our workshops who have a job, have a title, they went to school to be an engineer or something else like that, and their company looks down upon them for having and doing something on the side. Oftentimes they’ve got to get what’s called an OBA form signed, an Outside Business Agreement. They don’t want them doing something that interferes with their full-time salary, with their full-time job, their full-time focus as a job, as an employee or W2 or whatever it is. I know a lot of people struggle with it because they’re doing something now, maybe they’ve been doing something they went to school for and got to college for or worked their way up and they’ve hit that ceiling or they’ve hit that wall where they’re like, “This isn’t what I want to do.” They’ve come to the realization that the 40-40-40 plan isn’t for them. What do I mean by the 40-40-40 plan? They put in 40 hours a week for 40 years to retire on 40% of what they make. That’s the 40-40-40 plan.

Let’s be realistic here. A lot of people were taught to go to school, work hard, study hard, get good grades, get a good degree, go get a good job, and the company will take care of it. We all know that’s not the truth these days. We all know that is not the case in society these days. A lot of people are being outsourced. You’re being let go for younger employees. Your jobs being outsourced across the country or your job is totally no longer available because of technology and things increasing or you worked for the state government. That’s a great example of they don’t want you to do something outside. Most people have to go get something signed by a boss so they don’t get in trouble. When they’re in trouble, they’d lose their job. They get written up, lose a job, and have some bad things happen to them.

The good thing about real estate most of the time, especially real estate investing, is that we can use that as a tool. If you do have to sign one of those forms, “I’m just buying to flip properties. It’s a way to help boost my 401(k) my retirement.” It’s usually not directly related to the other job as an engineer or you’re working for the state government or things. It’s usually not related for the most part. Most of the time, a lot of employers will sign off on it because it’s something, “I do it as hobby. I do on the weekend. My family’s always had rental properties. We’ve always done fix and flips. It’s a hobby with mine on the weekends.” If you can portray that, that’s a great thing and that’s the truth most of the time. What gets a little dicey, specifically in the note game, when you’re reaching out to asset managers, when you’re reaching out to the banks and hedge funds only, you have to create a company profile.

NCS 263 | Finding Balance

Finding Balance: The good thing about real estate most of the time, especially real estate investing, is that we can use that as a tool.

That’s where our good friend, Aaron at Laughlin Associates and I talk about helping set up structures, LLCs, S Corporate, and things like that. You have to have that business mindset. Remember what Aaron likes to say, “I am not the company. The company is not me.” That doesn’t always go over very well at job sometimes. We’ve had some students of ours who’ve gotten written up or face losing their job. I’m not bashing jobs. They’re means to an end. Sometimes you’ve got to have the health insurance benefits through a bigger employer that a smaller one doesn’t offer or the 401(k) is not a bad thing if they’ll give you a percentage. That’s the easiest and cheapest money. It doesn’t matter what their match is. That’s what I always say as a financial advisor. If you’re working for a company and you have a 401(k), max out that matching. That’s100% return on investment. You can’t beat that for the most part.

When you have to start using your other money for things, that’s the investment side and I am always a big proponent of like, “Why are you telling me what I can or cannot do with my investment money?”It’s my money. If I want to buy a house, great. If I want to go buy an investment property, great. What gets a little dicey is when you get to the marketing side. One of the biggest places that we market and where people market on a regular basis is LinkedIn. LinkedIn is a very professional network. It’s not like marketing on Facebook or posting to Twitter, Instagram, or Google Plus. What I’m trying to get at is LinkedIn is a professional profile.

You have people that you work with on LinkedIn, LinkedIn is pretty good about notifying people that you’ve added a new job or added a new career, so you have to be careful, especially if you’re reaching out to asset managers on a regular basis. That’s the first place that they’re usually going to look, like an email from somebody or a phone call, a voice message. They’re usually going to jump on LinkedIn and say, “Who is this guy?” I did this for a student. As soon as he’s griping about something or complaining about getting a bid accepted, I’m like, “Let me go see who this guy is?” That’s the thing I look at. Many asset managers do that too.

You always have the balancing act. If I have my chemical engineer career, or whatever it is, do I start a whole new profile on LinkedIn and start from scratch there, or do I add a title or a LinkedIn resume on the bottom of what I’m doing? I can’t answer that question for you. I don’t like creating a whole new LinkedIn profile because you got a new different email and you got to keep up with it. It’s better to go ahead and throw it up on your regular profile as either hobbies or projects or as another thing, “I’m also the managing member of this LLC.” What you have to be careful about after you post on LinkedIn is your marketing side. Are you sending emails out to your database? Are you exporting your LinkedIn connections? That’s where it gets dicey. Are you friends with a lot of people on Facebook that you work with? That can work in your favor if you’re working somewhere and other people are disgruntled or aren’t making enough money. We’ve had some people whose bosses are like, “I want to learn more about what you’re doing. I want to invest with you.” I get that and that’s a good thing, but it’s not always the case.

Sometimes you have to worry about stepping on big brother’s toes. “Are they going to get upset and am I going to lose my job? I have not built my real estate business or note business up to where it needs to be.” When you do add LinkedIn connections, as you’re adding asset managers or other real estate investors, as you export that list, what you do not want to do is go ahead and remove anybody from it that you don’t want to see your emails. Go ahead and upload that list into your Infusionsoft or your MailChimp or whatever your email service provider is, and then go into your contacts on MailChimp or Infusionsoft and then unsubscribe those unwanted contacts manually. The reason for this is if you unsubscribe manually inside of MailChimp or Infusionsoft, even if you re-import the list which you’re going to do probably on a monthly basis as you grow your connections on LinkedIn, as you re-upload that list, it won’t add them again because you’ve unsubscribed them already from the list.

A lot of people are spending time each month going through and deleting them off their LinkedIn list before they upload them and they’re doing double the work. That becomes very much of a pain in the ass. It’s manual and it’s a deterrent for you using your LinkedIn contacts. When it comes down to your projects or things like that, or you’re talking to asset managers or talking to banks, they’re going to look at your profile. You have to be honest, “I’m an active investor in my part-time. I still work full-time for such and such company. I’m still engineer, I’m still a CEO or CFO, or I’m still in charge of this program for the state.” It’s a balancing act sometimes. Try and keep the two separate as best you can and maximize your free time that you have available for it. We all know with the ebbs and flows of life, there are times at jobs that you’d have to spend more focus there and can’t focus on your real estate business, or vice versa. You’d like to spend more time in real estate business, but you don’t have time so you’re stuck because you’re focusing on your job.

I understand some people absolutely hate their jobs. Some people enjoy it. I’m not sitting here telling you, “Go quit your job.” What I’m telling you to do is you have to focus on the hours that you have available. You have to focus on the time. If all you’ve got is ten hours a week because you work from 9:00 AM to 6:00 PM or 9:00 AM to 7:00 PM every day at your job, I don’t expect you to come home from 7:00 PM and work from 7:00 PM to 2:00 AM. That’s not a balanced life. If you’ve got friends, you’ve got family, you’ve got to eat and sleep. The last thing you want is to be working till 4:00 AM and have to get up and go to work at 9:00 AM and be unproductive and lose your job at that point. What you have to do is set out a plan of action that allows for you a transition period or transition plan if you want to ultimately be a full-time real estate investor or full-time note investor. You have to figure out, “What am I making at my job? How many deals do I need to do in a year to replace that annual salary or replace that monthly income on a residual basis?”

NCS 263 | Finding Balance

Finding Balance: Set out a plan of action that allows for you a transition period if you want to ultimately be a full-time real estate investor or full-time note investor.

The easy thing to do is look at your numbers. You want to make $120,000 a year. That’s what you’re making in as a salary. If you divide that by twelve months, you’re bringing in about $10,000 a month. Let’s say your average re-performing note deal is somewhere between $400 and $600 a month on a cashflow, specifically the low-hanging fruit stuff, the stuff that’s below $100,000 in value. Let’s say $500 a month is what you’re going to get on a re-performing note. We take that $500, divide that into your $10,000 a month, that’s twenty deals that you’ve got to close by the end of the first year to have a ten-month residual income coming in from modifications or from cash flow from your loan payments. If you’re using other people’s money and you have to split that cash flow, then you’d probably need to double your numbers. Instead of doing twenty in your first year, you need to focus on getting to 40.

That seems like an awful big number immediately when you’re right at the gates like, “I got to close 40 deals to get this one.”I’m the first one who’s going to tell you that you’re not going to have a 100% of your loans get reinstated or modified. It’s not going to happen. You’re only going to have about 50% of what you get done or what you buy. If you target unoccupied assets where they make payments or things like that, you’re still only probably about 50%, 55%, 60% of those reinstate on a good time. I would probably plan more than 40%. What does that mean? That means you’re going to buy notes that you hope that they’re going to modify or reinstate, and the borrowers who didn’t have their head shoved so far up there butt or shoved so far deep in the sand like an ostrich, they’re not going to respond to you. That’s not a big thing to fret and worry about because that’s the law of the business. It’s a natural act of people. Those deals are going to probably turn into foreclosures or REOs that you end up selling off and making bigger checks. If you’re making $5,000 or $10,000, check on those as you foreclose and turn into REOs.

Laura asked the question, “Does that 50% go for CFDs as well?” Yeah. We see that for the most part, especially if you’re targeting CFDs where the borrower has made payments in the last six to twelve months, which I believe you are. If you’re targeting CFDs who haven’t made payment in the last twelve months or it’s a vacant property, it’s not going to be a re-performing for the most part. It’s going to be a property take back or foreclosed and do a cancellation of contract on. Take it back and then either sell it as an REO or refinance to do whatever you want. That exit strategy, if you take the property back, it’s going to be up to you.

If you need 40 deals because you’re using other people’s money to get that $10,000 a month, if you get half of them turned into REOs, you should probably be making at least $5,000. Twenty of those deals turn into $5,000. That’s still not bad. That’s still $100,000 and the other twenty are bringing in residual income to you at$5,000 a month. Some people are like, “That’s big chunks. I can pay some debt off. Maybe I can put some money away and live off that money in savings while I transition.” That question is up to you. The idea though that you have to have is you have to understand those numbers. To get to twenty deals, if you doubled your numbers almost every quarter, you would get there. If you did three notes in your first quarter and you doubled that and you did six, that’s nine, and then you double that number to twelve, that would get you to 21. Three your first quarter, double that to six the second quarter, double that to twelve the third quarter. If you just do six and six in the last two, that gets you to 21 roughly too.

Our good buddy, Gene Chandler, talked about how he does one to three notes per month, and that’s phenomenal. He’s working full-time and he’s got a low cost living. Him and his wife do a great job where they’re at and allow plenty of time for him to do his hobbies that he enjoys doing whether he’s driving hot cars across Indiana or fixing up old cars or deal only with Gene. Gene’s a big fan of Mallard ducks, the wood ducks that you see on a lot of stuff. He does a lot of painting. He’s got a few unique patterns on a couple of those. You have to determine where you want to be and what you want to do. It’s a long-term goal aspect of things. I don’t think most people want to go to work 40 years anymore for another company and retire. A lot of people understand that that dream has long sailed away. It’s not a viable aspect, especially if you look at what’s going on in the world and the market.

The entrepreneur bug has bit a lot of people because they realize they can make more money and work a whole lot less. My trainer, Thomas, used to work for 24 hour as a fitness trainer, working 40 plus hours a week there. Most trainers only get 20% to 25% of what the people are paying for training. When Thomas left there, he immediately got a pay raise and is working less. He’s getting 100% of what he’s charging but he only has to work twenty plus hours a week to get what he was making. That’s the thing you have to realize. At some point, if you’re doing this for a while and you’re making money coming, but the bug gets in your brain, “If I make this just working ten hours a week, imagine if I work 40 hours a week.”

You have to be very careful of that bug. I only say that as a voice of experience. When I left my last corporate job in 2004, the freedom almost strangled me. I had a lot of freedom to wake up late and go home early and not do work on the weekends. You have to look at things and hold yourself responsible. The best thing to find is a coach or an accountability partner to give you the things to do to make yourself most productive. That’s often difficult for young entrepreneurs. They have social engagements. They’ve got the bowling league or other things like that are going on. If you’re single, you’re going on dates or hoping to go on dates.

When I’m trying to get at is set a goal or a standard. You’re not sold on the 40-40-40 dream. I get that. You have to realize that you have to put things in place. This is going to take time. We had a gentleman email me, “I got to make money in the first 30 days.” I’m like, “You better go start interviewing for a job then.” He’s like, “Why?” If you’re strapped financially, you’re going to be stressed. You’re going to overthink things. As you’re reaching out to asset managers, you’re going to sound desperate. You’re not going to make wise decisions when you’re financially strapped. Sometimes the best thing you have to do is put your dream on hold for a little bit to get your bases covered, to get your assets out of a sling and be able to breathe versus constant pressure. Constant pressure is not good for you.

I only say that because I had to do that for a little while years ago. I had to literally take a step back from my dreams and take a job for six months just to pay the bills, to get my assets underneath me so that we can move forward. It goes back over a decade. What I’m trying to get at is I’ve been in a lot of people’s shoes. I was working for a company now and I’m still doing some of my finance stuff on the side, and they’re like, “We don’t like that. That’s not a good thing. You should only be working here. Your sole focus should be here on this company.” I laughed and chuckled. I was like, “Really?”

I’m thinking to myself, “I’m seeing these employees that hate their job. They come dragging in every day. They’re not happy. That’s not what I want long term.” I made myself a promise years ago when I was leaving college that I would not work for a job that I hate. I did for six months until I got to where I was like, “I can breathe now. Let’s re-attack this.” Sometimes you have to retreat from the battle so that you can continue fighting. Your dreams and hopes and what you and your family want to accomplish are well worth fighting for. You also have to realize you have to have a game plan. It’s extremely important that your spouse and your family are supportive of you. You’re going to have a hard enough uphill climb all the times for getting out something, going to do something, to have your spouse or your family or your parents pulling against you from going forward, an almost impossible climb.

NCS 263 | Finding Balance

Finding Balance: Sometimes you have to retreat from the battle so that you can continue fighting.

What I always like to tell people is like talk with your family about what you want accomplish. Talk about your dreams and how you’re going to get there. Is your job going to get you there? If it does, great. You’ve got a great plan, but if you’re not happy and you want to do something, be serious about it. Many spouses grow very tired of their other spouses, either men or women. It’s on both sides, not just one or the other, although men tend to be a little more aggressive in moving things and women love having a nest, especially when you have kids, nothing wrong with that, it’s a motherly instinct, of having things shaken up and having things go sideways. As long as the bills are getting paid, as long as food’s on the table, that’s one of the most important things you have to do. If you’ve got family, you have to plan this out. You’ve got to work smart. You’ve got to plan your weeks. You’ve got to make sure if you roughly have about ten hours to focus on this, make sure you at least maximize five to ten of those.

We’ve got an investor, Ron, who works full-time. He enjoys his job, makes good money. He’s told me before, “I’m probably not going to go full-time.”I’m like, “That’s completely great. There’s nothing wrong with that.” He does a lot of his touches and his connections by going out and connecting with people at the local REIA clubs. That’s where his itch is every week because he travels quite a bit. If he’s home for the real estate club, he makes damn sure he gets out and networks for people for two to three hours. That’s how he stays connected. He also listens a lot. He also watches a lot of webinars. He takes some time off from his job to travel to conferences to stay connected. That’s the things that are good and keeps you plugged in while you build that dream, while you build the arc from the ground up that’ll be carried off later on.

Maybe you want to do this in the morning of your retirement days. Maybe you’ve got retirement around corner. A large percentage of our audiences are near retirement age and that’s great. There’s nothing wrong with building a second career if that’s what you want to do. Just be careful on how you approach it. You probably don’t want to make it known in your job, “I’m going to be a note investor.” That’s not going to be a good thing. Not only is that going to piss off your boss, but you’re going to lose a little face with your employees because they’re like, “What do you know?” You have to take a slow and steady facet of what we teach. You’re not going to get rich overnight. You’re going to get rich over time. You have to build it one deal, one asset at a time and take it. If you make offers and the offers aren’t accepted or you’re outbid, don’t get frustrated. It teaches a learning experience. Nobody bets $1,000 in this line of work.

We still see only roughly 30% to 40% acceptance ratio on our bid. If we’re doing 30% to 40%, you have to expect that you’re going probably see a 10% ratio and keep that in mind. If you’ve got a close on twenty deals if you’re going to use your own money or 40 deals if you’re using other people’s money, you have to take that 10% acceptance ratio into consideration. That means if you need to close twenty deals, you’re going to need to be making 200 offers. That can be very scary when you’re like, “200 offers? That’s over a year. That’s roughly fifteen or sixteen a month. That’s five a week.” That’s very feasible if you’ve got the time to focus on it, to work into it, and get it done.

We get some people that have weird working schedule. They work later shifts or they work a night shift. The best thing I can tell you is to focus on the day. Carve out a couple hours a day where you can do some of your marketing. You can reach out to asset managers on LinkedIn. That’s one thing that you can do at any hours of the day or night. A lot of people are like, “I don’t have a family. I can work a lot of hours.” Great. As our buddy, Gary Vaynerchuk, likes to say it, “Everybody has from 7:00 PM to 2:00 AM for the most part, unless you’re working a night shift.”This is not telling you to work every day. Maybe carve out three hours Tuesday, Wednesday, Thursday nights or the nights that aren’t crazy with scheduling, especially if you got kids or family.

What’s very important is make sure you share with your spouse, make sure you get your spouse involved. It can be little things like if you’re going to go to a conference, “I’d like to go to a conference. We’re going to stay at this hotel. I want you to go to the spa during the day and then we’ll go to dinner at night with some friends or families,” and stuff like that. That’s a great way to do things. With our mastermind group, people bring their spouses and their spouses hang out in the hotel either going to the spa or going sightseeing or doing some fun things. We encourage the spouses to come hang out at night or even hang out in the room for a chunk of the time.

NCS 263 | Finding Balance

Finding Balance: You can’t have an hourly employee teaching entrepreneur how to be successful because they have not been out there.

If we’re near Orlando and people want to go to Disneyland, go to Disneyland. We’ve done our masterminds in the past where we ended the day early so that people can go have fun with their family. We always try to do something to bring the family together, whether it’s a dolphin cruise or going to a ballgame or going Esther’s Follies here in Austin or going to a dinner together. The idea is you don’t want to fight your spouse. You want to try to embrace and have your spouse embrace it. They’re going to have fears, “What happens with this?” You just got to have the answers and say, “This is what’s going to happen with that. We’re going to work through this and we’re going to have a goal. We’re going to set specific things that we want accomplish along the way.” That’s always the easiest thing to do.

If you have family members helping you out in this business, hold them accountable. If they’re not doing the things that they need to be doing, call them out on it. They’re supposed to be partners in this business. You are not helping them in any form or fashion by letting them escape, let them go do what they need to do. If they’re not going to show up to things, they’re not going to make offers, they’re not going to help me market, then you need to call them out on it. It’s not always the easiest thing. Sometimes people that work together that aren’t married or don’t share blood are easier because you can call and say, “Come on man. Help me out with that.”

One of the things you’ve got to do is just be careful. In some jobs, like Eric’s a police officer, so you can’t promote pictures in your uniform for something else. You can’t be like “I have my uniform on and I’m talking about note investing.” That’s not a good thing. Firefighters, EMS, police officers have 24 on, 24 off, so you have a lot of downtime. Our buddy, Neil Clasen, same thing. He’s on for twelve hours and off for 24, something like that. One of the things you want to do is if your job does allow outside business stuff, OBA, make sure and identify what you can and cannot do. You don’t want to get in trouble. You want to keep calm waters at the office, so be careful about that, especially in today’s climate when you’ve got a career. A lot of jobs often don’t want you using social media, don’t want you posting things basically politically or religiously because those are the hot button items. You’ll get all these crazies right off.

If you are balancing or dealing with a full-time job while you’re trying to do this, feel free to drop us an email at Scott@WeCloseNotes.com. Feel free to drop me an email. I’ll be glad to get on the phone and give some ideas and pointers. We’ll put you in touch with somebody who’s doing the same thing. One of the things that I’m not a big fan of is I’ve had people come to me and say, “Let’s open up a coaching floor. We got a staff of people that we pay hourly that could coach your students.” I’m like, “An employee cannot teach an entrepreneur how to be successful.” You can’t have an hourly employee teaching entrepreneur how to be successful because they have not been out there. They don’t have their huevos on the line. They’re not out there taking the risks that entrepreneurs are doing.

We do a lot of things here with our office or staff to help try to drive things home for you. We could go a lot bigger. It doesn’t meet with what I’m trying to do long-term. It waters down the message. You want us to keep giving you the real information and keep focusing on things on where the market’s at. We’ll keep striving to do that as long as you keep tuning in. Go out and make something happen. Be safe, have fun, and we’ll see you all at the top.

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