What retirement formulas are you relying on to get you to a happy retirement?
Transcript: Hi this is Jeff Brown the “BawldGuy”. What we’re going to talk about today is some of the formulas used in getting ready for retirement through real estate investing. Now look, I’m an anti formula guy but some of them sound pretty good. Here’s one. You buy a rental home once every year or so until you get maybe 10. You spend the rest of your time before retirement paying them off. Hey, by the time you’re done you’re making some pretty good retirement income. Here’s the problem. Most people are buying in areas that they wouldn’t put their mom or the grandma to live, and I know a lot of people roll their eyebrows when I say that. But the bottom line is this. You’re retired. The property was 30 or 40 years old when you bought it. Don’t say no they’re not because we both know that’s true. Then you’ve got a floor plan that when you bought it was probably really out of style. It wasn’t efficient. People don’t like it. That means that not only do you have an average or worse than average area, but now you’ve got tenants who are just going to look at that and go I don’t want an I Love Lucy kitchen. Grandma had an I Love Lucy kitchen. You couldn’t have two people in there unless they were in love. So here’s the deal. If you’re buying 10 properties and by the time you retire 20-30 years later they’re all half a century or more old and you’ve got some functional obsolescence – that’s what we call bad floor plans, and bad kitchen design, and no appliances, or poorly situated appliances, and super low ceilings. I could go on and on. But the bottom line is you’ve got a bad area number one, you’ve got old properties – oh, did I say old properties? What happens to old properties as they get older and older? Their maintenance expenses go up. Right at the perfect time you’re retiring. Oh! Are you going to manage those 10 properties? Are they right where you live? Are you looking forward to being 68 years old, four years into retirement, and managing these 10 old pieces of garbage? I don’t think so! And no, I didn’t mean to offend you by calling them garbage, but they were garbage when you bought them. They just showed themselves for what they were when you retired. This is Jeff Brown, the BawldGuy. You’ve been warned. Catch you later.