The Journey of the lifestyle investor
The Journey of the lifestyle investor
I was having lunch with a fellow investment agent yesterday from the Midwest. He was getting his real estate license here in Florida and wanted to start his real estate career working with investors here in the warm climate. He shared of all his successes in the Midwest and was inquiring about the difference on working with investor here in Florida. What I shared with him made him sit up and listen with intrigue. I shared with him something he never heard of before or even gave consideration to. I shared that while he and I was both from the Midwest and typically focus on investments with strong cash flow, we had to open our minds to different investment strategies
Florida is home to the lifestyle investor.
I shared a story about a walk I took on a brisk morning a couple years back. it was a very cold week across the country and everyone was complaining about freezing their fannies off. I am fortunate to live in the sunshine state and while it may have been a bit cool for us we are blessed to be warmer than most of the country. I awoke to a crisp 68 degrees and sunshine that day. I took this awesome privilege of great temperatures and sunshine and went for a nice walk around the neighborhood where I lived at the time. This was perhaps a perfect postcard morning with sunshine, golf courses, people walking and jogging and more birds singing and swimming in the ponds than I have seen in a long time. I thought to myself why do I not enjoy these beautiful morning walks more often?
As I stopped to take this picture of all these birds sunning themselves on the water side another woman walked by. I raised my arms and said: “this is what it is all about” She smiled, nodded her head in agreement and replied. Oh I know, I wish my whole life was like this”.
As I continued my walk I could not help but think about her body language and her voice reflection and the words that she responded with.” I wish I could spend my whole life this way”.
I thought she maybe is not from Florida and she is in awe at the weather or perhaps she is referring to the freedoms of having time to just go out and enjoy a nature walk whenever you want to. One Thing For Sure is she was totally enjoying herself!
Sharing the Ahha that gave me clarity
My ahha that day was my logic mind was left at home while I was out on my walk. Feeling good and talking with people who were ecstatic to be in Florida. I suddenly understood what all these investors meant when they want to invest in Florida. You see I was a cash flow investor myself who only focused on buy and hold real estate with a goal of getting top cash flow dollar, I learned that day that a lifestyle investor really wanted investment centered around their desired lifestyle
Lifestyle style investors want cash flow of course along appreciation. but what was cemented into my mind that day is that lifestyle investors are investing first and foremost for lifestyle. They want to own property in an area where they can freely come visit whenever they want. They want to turn their vacations in to work cation and be able to deduct their business trips. they want to have property appreciating in an area they wish to someday move to .
This fellow investment Agent from the Midwest was very intrigued to learn of this. He was like I was focused on one thing. After sharing my discovery he was enlightened. I went on to share a number of different investment styles people have and how different they were to the mindsets of us Midwesterners.. We were both amazed to learn that there are a number of objectives people have when investing in real estate.
My question to you.
What is most important to you, Cash flow, Equity growth, lifestyle. Give it some thought What is your investment style. Have you given it any consideration?
Learn and duplicate what works
I always encourage people who truly want to invest in real estate to get involved. This is a great opportunity to learn which real estate investing model you prefer. One thing I have identified over the years is that most investors love to share their stories so talk to fellow investors and duplicate what resonates with you. (Word of caution) pick one model and stick with it. New investors get caught up in the rat race of chasing the next and greatest shining object and fail to ever make an investment, do not let this happen to you.
What do you realistically want from an investment?
Identify what you want from an investment. “I just want to make a lot of money” is a common response to this question and one that is not an investment strategy. With lack of focus you will get lackluster results. Here you will want your results to be realistic and sustainable so be purposeful when identifying what your expectations are.
Be purposeful and think of what you want as a long term outcome when establishing your criteria.
Things like: What do you want to invest in; single family, multi families, distressed property, fix and flips, buy and holds? To be terrific you want to be specific. What types of properties and investment style excites you the most. As you identify this, you will be on your way to an investment that will be worth owning. How will you pay or finance?
I always recommend to not even look at property until you have your cash or financing in place. The best deals move extremely quickly and you will want to move quickly on the good deals or you will lose them to the more seasoned, better prepared investor.
Establish your entity structure
Especially for buy and hold investments, you will want your LLC or trust, etc. set up. An accountant and an attorney can best assist you in establishing an entity that will both save you tax dollars as well as liability protection for your investments.
Create a plan
Create a plan for yourself and share it with all your team members. Your Realtor, your accountant, your attorney, your trades people. If everyone you work with understands what you want to accomplish, they can all have their eyes and ears open looking to help you find solutions to your investing wants and needs.
Happy Investing