Book Review: The Magnolia Story

William Glass

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August 22, 2017

A colleague of mine lent me his copy of the audiobook The Magnolia Story by Chip & Joanna Gaines & Mark Dagostino. If you aren’t familiar with Chip & Joanna Gaines they are a couple with a hit TV show on HGTV called Fixer Upper. I don’t watch a lot of TV but when I do the main things I watch are sports, HGTV, & Shark Tank. I am a fan of their show and enjoy seeing how they are able to take decrepit houses and rehab them in creative ways.

Chip & Joanna put on an entertaining show and you can tell that they truly enjoy the work they do together for their clients. The audio book is read by Chip & Joanna which is a really nice touch and highlights their journey to where they are today. It discusses the early struggles and how they fell into real estate and their HGTV show.

There are 3 things that I took away from their story that really resonated with me:

…2…1… Action – One of the keys to their success and quick rise to fame on their network television show is their continuous action. Chip before meeting Joanna was a serial entrepreneur starting different businesses from lawn companies to flipping businesses. He continually hustled and took action always moving forward and learning from his mistakes. During the toughest times that Chip & Joanna faced during the downturn and housing crash, they continued to take action on a development project that they knew would be successful. With their drive to continue to ensure the project would stay on track and deliver for their employees and prospective customers, they were able to secure the funding they needed in order to ensure the project would continue and not go under when they were on the brink of financial ruin.
Stay True to Yourself – What really stood out from this book was that throughout the ups and downs they faced in various businesses and projects they stayed true to themselves. What I mean is that they stayed true to their character throughout their journey and ultimately throughout their success. It’s been the same Chip & Joanna before the cameras showed up, during filming, and when they go home. Ultimately this aspect of being your true self-shone through and serves as an important reminder to everyone to be true to who you are no matter where you are in life. A major shift in circumstances shouldn’t be the catalyst to change who you are or for you to pretend to be something you are not. Being true to yourself no matter your situation is an important lesson in life.
Hockey Stick Acceleration – the road to success wasn’t easy and there was a lot of hard work and determination that they went through. At the end, the couple discusses all of the wonderful things in their lives now that they have had this success and opportunities that have arisen. Chip makes a comment about how easy it has become relative to the early days when they were really grinding to make ends meet. This is a comment I have heard other successful people mention and we can see countless examples today. An obscure individual whether in business, TV, or sports spends years working extremely hard to achieve success and when they finally do “make it” tremendous opportunities open up more easily. People recognize their accomplishment and want to be a part of it. It is a great reminder that success is a long game, not something that happens over night. The long hours and sleepless nights you have for years will pay handsome dividends in the future. Stay focused, stay determined, and work hard because good things will come to those who cultivate the climate for success.

Those were the 3 main pieces I took away from the audio book. This was the first audio book I had read in a long time and it was very enjoyable to listen to and from work. One drawback is it is a bit fluffy in a feel-good sort of way. I think the details of the journey were more interesting than the inflated language and delivery of the message. I would have enjoyed more about the specific projects and iterations of the business.

Overall worth a listen to in the car and provides a good story that you could listen to in the car on a road trip or with your kids.

Progress Report – August 2017

William Glass

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August 20, 2017

1

The purpose of this blog is to share my journey and the knowledge I gather along the way towards financial freedom. I have shared my goals and targets of earning a million dollars by the age of 28 and $10 million by the age of 30 by focusing on doubling my monthly income. The first target was $4k per month by December 2016 which I was just shy of making at my base salary at my job as an Account Executive ($42,000/year or $3,500/month – not including my commissions and before taxes). In April I received a small raise bringing my base salary to $47,200/year or $3,9300k/month almost to my target of $4,000/month in gross income mark.

The second milestone was $8,000 gross income/month by July 2017. I needed to double my current monthly income in order to get there… unfortunately I did not hit that goal in July of 2017… I fell behind to my dismay.

Despite not hitting that target I remained focus and determined to continue to work towards my goals of achieving a gross income of $1Million/year or $83.4k/month by May 29th of 2020 my 28th birthday.

While I didn’t hit my goal of $8k/month in July of 2017, I did inch closer after I acquired a duplex (read more about the deal here Part 1 & Part 2). and after finding a tenant to live on one side of the duplex and myself and a roommate living in the other, I was able to increase my monthly income by $1,500/month. This brings my current total gross monthly income to $5,400/month as of August 1st, 2017. I am now just 32% or $2,600/month behind where I should be. This is a small gap to close and I am looking at what I can do to get to that $8,000/month mark and beyond to my next target of $16,000/month by February 2018.

Scoreboard

Today 8/18/2017 – $5,400/month in gross income (before taxes & expenses)

~~$4,000/month – December 2016~~ – Achieved April 2017 – 4 months behind
$8,000/month – July 2017 – as of August 2017 – $5,400/month – $2,600 delta to target
$16,000/month – February 2018
$32,000/month – September 2018
$64,000/month – April 2019
$128,000/month – November 2019
$249,000/month – May 2020

The reason why this is so important to me is that I want to be able to spend time with my family, provide value to others, and give back to those that are in need. Ultimately I’d like to have a solid financial foundation that provides the support for me to focus on others. At this moment in my life, I am able to focus on creating a strong financial support system for my ideal life. I wrote down in 10th grade that I wanted to be making a million dollars a year by the age of 30 and by the age of 40 I want to have given away over a million dollars. That’s my ultimate goal is to be able to look back and tell my 15-year-old self that he did it. He put his mind to it and achieved it.

Duplex Deal – Part 2

William Glass

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August 19, 2017

3

This is part 2 of my original post in June about the duplex deal I had under contract. Read the original story here first!

Since my last post about the Duplex that was due to close on June 29th. It ended up closing on July 5th while I was out of town in New York City. It took longer to get the clear to close than expected and with my travel dates set for July 4th, I did a remote closing where a notary comes to you to sign the papers on July 3rd and the papers being mailed and arriving July 6th. It was nerve racking being at a distance, but I much preferred it than coming anywhere close to the sellers who had been acting very irrationally the days leading up to closing.

In the end, it all worked out and the tenant that I was set to inherit on the non-vacant side gave me notice that they would be moving out by the first of August. I was nervous at first that the place would be a wreck and how to get the other side rented as quickly as possible with the current tenant still living in the property. Luckily the previous tenant had been very clean and she spent time thoroughly cleaning the unit and she left a week and a half early!

While she was still in the property I advertised the listing and posted pictures of the other mirror image side to gain interest on realtor.com, apartments.com, Zillow, and Craigslist. I received at least a dozen inquiries and set up an open house for the second Sunday before the end of the month 3 or 4 of the people who had reached out about the property. She left that Friday and I spent Saturday cleaning, painting, mowing the lawn, and pressure washing the driveway and walkway to the front door as I prepared for the open house.

I had all of the potential renters come and see the unit at the same time and without realizing it created a competitive situation to rent the unit. At that open house, I had the prospective tenants fill out a hard copy application that I reviewed after the showing. I only had the top candidates fill out the online application that conducted a background and credit check for a $35 fee.

They were two college students at FGCU and they passed the background check. After which I got them over a lease the next day to sign and have their parents co-sign. By Wednesday I had the property rented and check for first month’s rent and a security deposit in hand 5 days before the start of August.

It was a lot simpler than I had expected and I had a makeshift system that I used that seemed to work well. Additionally, I was able to raise the rents from what the previous tenant had been paying $825 per month to $1,200 per month. That is a 45% increase just from increasing rents from below market rent to above market rent with just a little bit of cosmetic work, sweat, and market research.

My mortgage payment including PMI, taxes, and insurance is $1,178 a month. This means their entire rent covers the debt service on my loan. Additionally, I have a roommate that lives in the other side with me and he pays $300 a month. In total the property grosses $1,500 a month or potentially $18,000 a year if it stays fully rented at current rents. Granted this is unlikely and I still have maintenance, repairs, and capital expenditures to set aside capital towards. Essentially besides utilities, I am able to cover my cost of living and I have my tenants paying off my debt and building equity in my property.

This is far from a home run or even a double it is a nice start for my first income-producing property and I am happy with the results. Some of my key takeaways are that action is better than inaction. Doing your homework and taking small risks pays off. I almost didn’t list the property for rent at $1,200 for thinking it was too high – in hindsight, I may have been able to ask even more but felt it was fair market value and I knew numbers wise it would make sense for me.

Overall I am very pleased with the outcome and am already looking for the next opportunity to find another investment deal!

Check out other related blog posts:

Duplex Deal Part 1

Why I chose Real Estate to Start

Journey to Financial Freedom

Book Review: The E-Myth

William Glass

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August 16, 2017

7

I listen to a few different investing podcasts (Bigger Pockets, TIP, & Tim Ferris to name a few) and the hosts often ask their guests about influential books. One of the books that are mentioned quite frequently is The E-Myth by Michael Gerber about entrepreneurship. I finally bought the book and read it and found that the basic concepts were very helpful. Be aware there is a slight salesy undertone as he plugs his company and their consulting services periodically. Besides that point I found this book to be very impactful on how you think about your own business. Whether you currently own your own business, hope to one day, or want to find a great company The E-Myth can provide guidance.

The underlying theme is to create explicit systems and processes that anyone can follow that will allow you to hire others and ultimately focus on the strategic direction of the business. In doing so you create the ability to remove yourself from the business at some point. Architecting the structure so it will run the same no matter who is in charge. The first section of the book explains the importance by focusing on the high percentage of businesses that fail in the first few years of their existence. A key piece being they focus on the tactical work and essentially own their own job. This is a theme through many of the non-fiction business books you will read from Rich Dad Poor Dad to the 4-Hour Work Week.

The remaining sections of the book focus on highlighting the importance of detailed systems and processes built on data analysis in order to produce superb results regardless of who is running the show. These systems and processes become the lifeblood of the business and are what ensure consistent and quality results are delivered. Gerber utilizes the example of McDonald’s and the franchise model as the impetus for this thought. You have probably heard someone ask if they thought they could cook a better hamburger than McDonald’s to which you are likely to hear “yes.” Followed by can you consistently serve a better hamburger than McDonald’s at scale? The answer likely is “no” unless of course, you are a competitor. The central idea is that while there are plenty of better hamburgers on the market, no one is able to execute on a business system like McDonald’s at scale. This example is meant to highlight the importance of clearly defining and refining your business’s processes and procedures.

Once you have your systems created and clearly defined, then your goal is to hire good people to execute on the systems you have created. This way you are able to build a business that is not dependent on you as an individual, but rather the results and outcomes the processes you created to produce.

Having the processes defined and finding people to replace you is great, but in order to have the best opportunity to be successful as a business, you have to ensure you clearly define the WHY. Why does your company exist? What are you really selling? – (Nike sells a lifestyle – not apparel) Do your employees truly believe in what you are selling and what the why of your company means? Answering those questions and getting to yes is one of the last keys to ensuring you are set for success.

I enjoyed this book and found it to be a quick read. The story that the author utilizes to explain his view on entrepreneurship and the myth around “entrepreneurs’ who are aren’t truly failing is an interesting idea. I believe that there is an entrepreneur in all of us and if we wish to awaken it we are able to, we just have to make a conscious decision and understand that we must exercise and flex those muscles to grow.

Buy the book on Amazon below and check out other book reviews

Commit to Win

First Things First

The One Thing

Thinking for a Change

Book Review: Commit to Win

William Glass

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August 8, 2017

7

I recently read Commit to Win by Heidi Reeder that discusses four main elements needed to reach a goal. The four variables you need to focus are:

Treasures – the good things that come from working towards a commitment. It is important to clearly recognize and define the positive benefits of the goal and this is essentially the “why” behind your commitment.

An example of exercising more may include – the feeling of accomplishment after a workout, more energy throughout the day, and sleeping better at night

By highlighting all of the positive results and outcomes from committing you are able to focus on the good things throughout the process and the results that follow from sticking to our plan.

Troubles – the challenges that you face as you work towards your goals. Clearly, state the obstacles and recognize that there will be challenges. The key is this will help you recognize the troubles that are real and the ones that are excuses you may use.

Workout example – Not enough time in the day, it’s raining outside, the gym is too expensive.

Some of these you can control like which gym you use or have a backup exercise routine for rainy days. By recognizing troubles you can properly prepare and better sustain your work towards your goals.

Contributions – the amount you have already contributed towards your commitment. What is the “sunk cost” of time, money, and energy?

Workout example – I’ve already paid for this month’s gym membership, have already spent 4 weeks training for the half-marathon, or I cleaned out the guest bedroom replacing the furniture with my workout equipment.

The idea being when you do have doubts and the troubles become the focus, you can choose to remember all that you have invested in this goal and commitment and that remembrance will help power you through. Being able to understand your “sunk cost” – an investment you can’t get back – this will help you recommit.

Choices – The different alternatives we have – good and bad. You can choose to do x or not do x but what are the consequences.

Workout example – I can not go to the gym and watch TV while eating potato chips on the sofa, I can force myself to do at least 10 minutes on the treadmill, I can go play tennis today rather than my weight lifting routine

There is a multitude of choices both good and bad that have consequences affecting the outcomes in our lives. Recognize the vast number of choices that may arise when you are set to workout more and determine if they are a good or bad alternative. Going to play tennis rather than to lift weights is a better option than binge watching a show on Netflix.

Ultimately I really enjoyed the simple concepts behind Commit to Win and found the most valuable part learning when to recognize it’s time to give up a commitment. Just as the above example is about committing to a goal, Reeder discusses how it can be used alternatively to identify when it is time to let go and move on from a commitment. This was eye opening to me as I am very much a goal setter and always working towards goals. If you don’t achieve them they never really go away they just morph into something with different timelines or a new variation. I recognized that I am not great at giving up things and de-committing from a goal that does not matter or is irrelevant to what I truly want. This book is worth the read just for instilling this concept if letting go is a challenge for you and actionable steps to sticking to your goals.

If you’d like to check out the book yourself below is the Amazon link as well as links to my other book reviews

First Things First

The One Thing

Thinking for a Change

Book Review: First Things First

William Glass

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July 8, 2017

3

I recently read and wrote a short piece on The ONE Thing by Gary Keller & Jay Papasan and I am almost finished with a similar book First Things First by Stephen Covey, Roger Merrill, & Rebecca Merrill. I have found First Things First fills all of the gaps that were missing in The ONE Thing. Covey, Merrill, & Merrill do a fantastic job of helping tie back the most critical activities to all of the other tasks that pull at your attention and time. This piece goes into more detail of how to determine your most important tasks in each area of your focus and then how to implement scheduling and accomplishing those tasks.

First Things First ties back to the prioritization quadrant (pictured below) that looks at activities from the standpoint of both urgency and importance. The idea being we tend to focus on the urgent rather than the important non-urgent activities.

Utilizing this visual and then focusing on solely the important boxes of Quadrant I & II you are able to help start to identify what you should focus. As you sort through your priorities you realize that Quadrant II the important, but not the urgent box is the one we tend to fail to accomplish. Focusing your attention on Quadrant II activities is one of the main premises of the book. From there they authors delve deeper into how to ensure that you properly schedule and prioritize those activities throughout your busy work life.

The reason I find First Things First more impactful than The ONE Thing is best summed up by this example: You have as a Quadrant II activity to build a closer relationship with your child. The issue is that you can’t just knock this out in a half hour and then move onto the next priority in a different aspect of your life. If your child has a major crisis you aren’t going to console them for half hour then say “sorry kiddo time for me to move onto my next priority.” That would completely erode the relationship and possibly create resentment. At the same time, you can’t always schedule a Quadrant II activity like building a stronger relationship with a loved one, but both books do recognize the importance of recognizing the priorities in various aspects of your life.

What I really enjoy about First Things First is how it takes a more holistic view of what if, why, how, and what to do in order to actually put first things first. Personally, the additional context and looking at the whole is more valuable in my learning preference than isolated to the point where you lose sight of the forest amongst the trees. There is value in both perspectives and perhaps if I had read these books in the reverse order they would have resonated better as First Things First starts broad and The ONE Thing is more narrow. Overall I have thoroughly enjoyed this book and found it helpful as I look to prioritize and organize my activities to ensure they are aligned with my ideal purpose in life.

Amazon Links and other book reviews:

The One Thing

The E-Myth

Commit to Win

REIA Meeting – State of the Market

William Glass

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June 30, 2017

1

I am a member of my local Real Estate Investors Association (REIA) and attend the monthly meetings regularly and the monthly luncheons when time permits. I enjoy the discussion and hearing from investors that are working in the market everyday to hear their perspective. The REIA I am a member has a fee associated, but is focused solely on discussing business and there are no sales pitches or peddling of any products which is nice.

The last general meeting we had was on June 21st and the topic was a review of the local market in Southwest Florida (SWFL). Before diving into our local numbers, Jeff Tumbarello a founder and director of the SWFL REIA recapped the trends in other areas of debt. We looked at the trends in auto debt, consumer credit card debt, government debt, etc. essentially every debt category has risen above the highs of 2005 except… mortgage debt which is close but still below the highs over a decade ago. Essentially looking at the fact that we are in a very high debt ridden time period one of the overall healthiest (solely on this metric) is the housing market.

There are obviously worries for concerns globally as well looking at the mess in the Euro Zone, debt levels in China, and continued conflict in the Middle East. The United States, relatively speaking, is in a better place to weather any global financial storm that is sure to come in the near to distant future. We know that our global economy is cyclical and at some point something will give. That being said the US still being the world’s reserve currency is in a great spot relatively speaking.

Back to local market and real estate… essentially the foreclosures have dropped dramatically and flattened out to very low numbers in Lee and Collier (southwestern Florida counties). A high number of purchases are done in all cash – around 45% in Lee & Collier County which is well above the national average of 15%. Our market is pretty steady in terms of its gradual growth. There are a lot of market factors to consider as we have more retirees moving down and some companies trying to recruit and bring younger people to the area. There is steady growth currently in new construction of both residential homes and apartment complexes. The issue is the homes are priced $250k+ pricing out a big portion of the population.

Affordable housing is a big topic in almost every city which is nothing new, but it is a concern and likely the reason there is such a high rental population in SWFL for permanent residents. Regardless of my commentary the market seems to be chugging along here in Lee & Collier County (Fort Myers, Cape Coral, Estero, Bonita Springs, & Naples) for retirees, residents, and investors. That being said it is difficult to find deals as an investor in the current market and you have to work harder in a more competitive market like our current one.

SWFL REIA Website

Book Review: The One Thing

William Glass

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June 29, 2017

3

The ONE Thing by Gary Keller & Jay Papasan was a book that had been on my reading list for a few months now. I’d heard it come in podcasts such as Bigger Pockets and seen it pop us a recommended read on Amazon. I had very high hopes for this book and because of that, I was slightly disappointed. Overall the book delivers a clear message on focusing on a single stretch goal and then continually breaking that down into one thing you focus on now.

The concept is clean and delivered in an easy to consume manner, my difficulty, which may be more to do with the difficulty of breaking down my one thing, is practicality of implementation. While the book is focused on teaching you to focus on the most important thing first, it dictates that there are many important ONE things in various areas of our life. This could be in your health, business, family, spiritual, or financial life. The key is focusing from there as to how you dictate that one thing each day and within specific time frames. They do try to discuss different strategies utilizing a calendar, but in practice, this is the most difficult piece for me.

I do believe it is a good read and will help you with your time prioritization and there are many good points about multitasking which are valid. The book missed the mark simply from how hyped up it was from all of these other sources that quote it as a top business book. If I didn’t have preconceived notions about how earth shattering this book would be, I would have likely taken away more.

The premise I find very important and strong of focusing on the single most important tasks or activities that will put you closer to your goals. This resonates with me and is a simple to implement strategy in your everyday life. I’ve read one of their first real estate books The Millionaire Real Estate Investor which I very much enjoyed as a practical and educational guide. The ONE Thing is a quick read and worth brushing up on prioritization and focus on your goals.

Amazon link and other book reviews:

Thinking for a Change

Commit to Win

Why I Chose Real Estate to Start

William Glass

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June 28, 2017

2

Why choose to house hack on my first deal rather than buy a single family home or even just an investment property? The key is it starts with your investing goals. Before even settling on real estate, I established my main goal is to create multiple passive streams of income that will continue to put money in my pocket regardless of whether I work or not. Once I established that creating passive income streams is my main focus, I explored different ways to create/acquire passive streams.

I quickly settled on real estate simply because when you look at the most successful and wealthiest people globally the one consistent thing, no matter how they acquired their wealth is real estate. They all invest in real estate as a either a means to attain wealth or as a store of growing and maintaining wealth.

This is what lead me to focus on real estate and as I am looking at developing passive streams, buy and hold investing is one of the most straightforward strategies. I settled on a duplex for these reasons:

Inventory and Price
Flexibility
Financing

Inventory and Price – I had to find something that was in my price range in the town I live. Some investors are comfortable managing properties from a distance starting out, but I want to be close initially thus limiting the areas I could invest. Based on what I could afford and the properties that met my goals, I settled on a Duplex as it was under $200k and in a C+ or B- Neighborhood that is up and coming. Yes there were nicer duplexes and other investment properties but they did not meet both my pricing criteria and location criteria.

Flexibility – Looking at a multi-family property versus a single family property provides additional flexibility. I am able to live in one side in the interim and long-term rent both sides. If one side is vacant I only lose 50% of the income versus 100% in a single family home. Duplexes are still traded similarly to single family properties that it provides additional opportunity to sell to either investors or non-investors in the future.

Financing – The last piece is that I am able to live in one side and rent out the other. This allows me to cut down my rental payments while still having my mortgage covered by the other tenant. I still have taxes, insurance, and maintenance to take care of but the majority of my expense is paid for and I’m building equity. Along with building equity, properties between 1-4 units are able to qualify for traditional bank financing meaning I am able to go through the same lending process as buying a regular single family home. Additionally, I am able to utilize FHA financing and put down only 3.5% versus 15% for a conventional duplex loan. Thus my cash to close is less and I am able to have more cash reserves in case of capital expenditures (like replacing a roof) or maintenance (like fixing a toilet).

This is why I chose a duplex as my first property – Remember it all starts with your goals for investing then from there you choose a strategy.

Book Review: Thinking for a Change

William Glass

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June 27, 2017

5

I recently finished reading a book called Thinking for a Change by John Maxwell. I enjoyed this book quite a bit and found it an interesting topic to focus. The core piece that I took away was that this book is focused on deep and reflective thinking. The idea being that we ensure we take time out of our days, weeks, months, and years to ensure we are truly reflecting on the events that occur throughout our lives.

It is only through intentional and regular thinking that we are able to gain true insights into ourselves. There are certain questions that we should ask to ensure that we truly do take the time to reflect. I found the book carried on a bit longer that it needed, but there were good use of stories throughout that brought some of the concepts to life.

For finding this book in a Goodwill it was a great purchase and read. I would recommend that you skim through and focus on the key leanings Maxwell discusses around intentional reflective thinking. I find that some of my best time to reflect occurs on airplanes or when I am traveling. It is during these times when I am able to reflect without the distractions of daily life and achieve breakthroughs.

I believe it is very important for everyone to reflect on the events in their lives in order to ensure that we are learning and growing as we progress through life. Maxwell uses an example of how he asks questions in order to teach his children the power of reflecting and the impact it has on their experience. Without those probing questions that challenge children to reflect on events rather than take them at face value or allow them to pass through, children may not learn the importance of thinking. What I recognize is that sometimes we all need a nudge to ensure we take time to reflect rather than just allowing learning opportunities to come and go.

Amazon link and other book reviews below

Amazon Book Link

Commit to Win

The E-Myth

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