You’ve read it here before, but it’s crazy sometimes how a cluster of calls and emails will come in a 3-5 day period, all essentially about the same topic. It’s entirely possible this phenomena happens due to something I’ve written, but sometimes I can’t ferret out a common denominator. This week it’s been real estate investors who’ve done more than reasonably well, or on the cusp of that level. All of them have been smarter than the average bear, and all except one has been decidedly experienced.
Though they may recognize themselves here, I’m gonna change some factoids to give them some cover for privacy.
I’ll be writing next week about what I might recommend they change in their approach, long term. However, make no mistake — they’ve already done better than 98% of real estate investors you may know. Two of the three have generated enough cash flow to retire — one has more or less, kinda sorta semi-retired. One is still havin’ fun, and I quote, ‘…building my empire’. He’s been spectacularly successful with his current strategy, as has the semi-retired guy. The only thing that exceeded his success so far, was the genuine humility he displayed during our conversation. In fact, now that I think about it, they were all unassuming, humble guys.
The third one is the youngest, with a killer family, including a few kids — the oldest of which is still in junior high. Besides all being investors, it would seem on the surface they don’t have much in common. One is a semi-retired contractor over 60. One has monster big time cash flow, in and out of his home state, is in his 40′s, with a wife and a barely walking new son.
So what is it that they all have in common?
As well as they’ve all done, as prudently and intelligently as they’ve handled their investment capital, they haven’t been totally aware of some of the killer options on their collective menus.
Options?
How ’bout the ability to sell income properties with huge capital gains, but without having to pay taxes? OR Increasing their cash flow from nearly double the current amount, to five (5!) times the status quo? OR Developing a stand-alone basket for real estate investments, that will grow future cash flow like Starbucks puts out coffee — except tax free. 
The first guy will be able to take a prodigious capital gain without having to go through the more involved process of a tax deferred exchange — and not pay penny one in taxes. Also, we’ll be able to increase his yearly pre-tax cash flow by 70-85% — more than 100% in the next 6-8 years. An ancillary benefit will be freeing up countless hours of management and repair/maintenance time each year. A consequence of this newly created time will be more buying/rehabbing/selling in his local market — you know, for something to do.
The guy with the most cash flow currently (by far), has so many options he’s not previously explored, it’ll take a few conversations with related experts to figure out which way might be best. That’s a very cool position in which to be. One of his options will more than likely be the ability to generate roughly $250,000 a year in income — tax free, in roughly 10-20 years. That would be in addition to far more than that from his personal real estate portfolio.
The third guy, the youngest, has the chance, over time, to enjoy a magnificently abundant retirement, as he’s still in his early 30′s. We’ll be able to take his current equity and, with a couple simple moves, increase his cash flow, capital growth rate, and tax shelter hugely. Down the road he’ll also be able to finance all or much of his kids’ college education without relying on savings or scholarships. Furthermore, he’ll be able to make a planned move in the next 5-10 years to exactly where they’ve always planned.
BawldGuy Axiom: A Purposeful Plan must, by definition and design, include the subjective needs and plans of the investor. To do otherwise defeats the spirit of ‘retiring exactly the way we want to’.
Over the next week or so, I’m gonna lay out what I might advise these guys to do. I already have it in my head, and it’s exciting to think about. All three will truly be able to move their agendas up a level or three. How cool is that?!
If you’re in a space you suspect might be improved by an option or options of which you’re unaware, gimme a call. You might find out you’re doing exactly what you should be — OR — you could learn about some options you never knew your menu had. Call 619 889-7100, and wait for, “This is Jeff”. Have a good one.
Related posts:
- Real Estate Investors – Don’t Be Seduced By Rickety Cash Flow
- Real Estate Investors — Is Your Addiction To Cash Flow Lowering Potential Retirement Income?
- How Real Estate Investors Really Get It Done – Attn: Newbies
- San Diego Real Estate Investors — How’s That Income Property Workin’ For Ya So Far?
- California Real Estate Investors Using 1031 Exchanges To Turbo Charge Portfolio
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