Epic Real Estate Investing - How to Invest in Real Estate When You and Your Spouse Are NOT On The Same Page… | 911

Episode Date: January 28, 2020

This Tuesday, our turnkey girl Mercedes reveals how a couple can invest together without straining the relationship, even when their risk tolerance is a complete difference! Stay tuned and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. So you want to be a real estate investor, but you don't want to do the work. If there were only a way where someone else could do it for you, now there is. Tune in here each and every Tuesday on the Epic Real Estate Investing show for Turnkey Tuesdays with your host, Mercedes-Torres. Hello and welcome, welcome to Turnkey Tuesdays brought to you by Epic Real Estate Investing. my name is Mercedes Torres, your turnkey girl, and I help busy professionals acquire passive income through real estate investing so they don't have to work so hard and maybe even retire sooner. So this show has been created to share tips, advice, and real life, real estate experiences so that you can create passive income in your world.

That said, if this is your first time, here. Glad you made it. Make yourself at home. If this is not your first time here, welcome back. You know, investing is an emotional seesaw. I experience it every day. It could be the best of times and the worst of times. It's full of wisdom and full of folly, but it can also be scary and often lead you to just focus on the risk. I mean, in short, investing is enough to make anyone crave a Xanax on a regular basis. And when you pair the concept of investing with the daily interactions of your marriage or your long-term relationship, the emotional tensions can only rise. But investing, I think, is also a necessary part of marriage.

It's an important part of obtaining your financial gold just as important as it is to agree on who's going to wash the dishes after dinner or who's going to be in charge of the laundry this week. So how can couples partner and invest together when your risk tolerance is completely different? and without letting the emotional turmoil strain the relationship. Now, I'm going to share some pointers on how to invest because the reality is, I speak to so many of my clients that the reason they have not jumped into investing

is because their spouse or their partner is not on the same page. and not necessarily with the world of investing per se, but they're not on the same page because maybe her investment risk tolerance is completely different than yours. Perhaps you focus on what you can gain in real estate investing and she focuses on how much she can lose. Or maybe your partner focuses on not tapping on their 401k money. And all you're thinking about is, oh my goodness, I have an old 401k account that I can use for investing. So let me help you out a little bit because if you are experiencing this, you're not the only one. This happens on a regular basis, on a daily basis, I have to say. And it's quite

common. So first, start with a conversation with your partner or your spouse about your investment goals. And make this conversation, if there's tension in the relationship about it, make this conversation a conversation that is not heavy. Talk about it while you're having a glass of wine at dinner or talk about it over coffee. Don't make it a taunting, a huge task. You know, Don't start the conversation by rolling your eyes. But define what investing, specifically in passive income through real estate, what it means to you. And then define what that goal is to you and ask what that investing goal is for your partner.

And dive deep, discuss the fears. Really point out the one thing that. keeps you or your partner from investing. And I'm talking just about the individual. So talk about your fears and then let your partner be heard about your partner's fears. And then dive into your goal. Why do you really think real estate investing is important to you? Show your partner what real estate investing can create for both of you. Paint the picture. And in addition to paint the picture, define your number.

Not your goal, but your number. It could be the number of properties you're attempting to achieve, or it could be perhaps a dollar amount. But define that number and then draw a line. and see if your partner can meet you halfway with that number. So think to yourself, what's the number? And then think what's the worst possible scenario? I know that's counterintuitive.

But let's just talk about, let's just assume, that you in the worst possible scenario, have $25,000 to invest in an investment property, which, by the way, it's very doable for you to find a property where you can purchase it with only $25,000. So let's assume that this $25,000 goes into this property and the property performs miraculously well. It produces a 9% cash on cash return. Show your partner that number. Okay?

Show what that means in cash on cash return for the first year. Show what that means in tax benefits. And then show what that means in five years, 10 years, 15 years. Show that number. But wait, it doesn't stop there. Show the flip side. What happens if you were to lose that $25,000? Say you buy that same property and your tenant bail.

in month three. You now have a vacancy. You now have a rent ready. Show what that number is going to be. And let's assume that's going to cost you an extra $5,000 that year. That's $30,000 that you could have lost potentially. And then think about the real of it. What will it cost you to make up that $30,000? Sure, it may cost you a year or two, but it's not the end of the world. And the reality is, statistics show that that negative scenario that I just shared with you, the worst possible scenario short of the house burning down. Actually, if the house burns down and you have insurance, you would be paid in full. So show that scenario as well.

However, show the number and show the worst. possible scenario as to how much or how long it will take to recover that $30,000 that could potentially be lost. And here's where it gets good. Everything that could be lost could be recovered. And as I said, statistics show that the likelihood of that negative scenario happening is so slim that it is likely not to happen. So having said that, define what success looks like for you, for each of you, not together, for each of you. And that will lead you closer to the next step of investing together.

Now, really define what that means to you, what investing in real estate and the potential of creating passive income. Now, get into the details. Again, the numbers. I say it every week. Numbers do not lie. So spread, you know, bring it out a spreadsheet if you have to. Doodle it on a napkin, but really, really define what those numbers are and then what the goals are. So once you bring it back to the table and say, okay, let's invest together. Let's see what's, the possibility of that is. When you start defining your goals, define them granular to the T. So if your goal is to provide for your children's education, or it may be having a fixed dollar amount at the end of each month, maybe it's $200, maybe it's $500, maybe it's $20,000 a month.

Whatever it is, define that number. Or the goal. might be just to maintain a lifestyle in retirement. Maybe you're super young. Maybe you're still in your late 40s, early 50s. You still have 20 years for retirement and you're looking to see what that retirement is to you. You know, I'm 47. Retirement to me is right now. So to me, that number was if I had to shut everything down tomorrow, what's that magic number for? me. The number could be $6,000 a month for you, or like me, $30,000 a month. It doesn't matter what the number is. You just have to define it and you have to be crystal clear. I've shared many times with you that when I had my son, Mattel, I was freaked out that I had to provide a college

education for this kid. And I literally said, how am I going to do it? And I just, did the math, if I were to buy a house for him today, in 18 years, I'm willing to bet that if I was to sell that house, it would pay for his college education. And so we've done that. Now, Mateo is only eight years old, but that one house that I bought just eight years ago has now produced two houses for him. So the kid owns two houses, and he's eight. And he's eight, years old, one is going to pay for his college education, the other one is going to pay for his wedding. Needless to say, the reason that that happened was because I defined a number, and that number was his college education when he was 18 years old. Okay? So for you and your partner,

define what that number is, define what that goal is. And it could be different. Each of you can have your own numbers. Whatever it is, respect that number and come to a happy medium. And here's where it gets really tricky. Because let's just say that each of you have completely separate risk tolerances. You may be over the top crazy with just diving in, but your partner may be more conservative than you. Your idea may be wanting to use that old 401k from a previous job or the current 401k that you have with your employer. And your partner can't even conceive of the thought of touching those funds. Or you may have a vacation account that both of you contribute evenly every month so that you can

take that one amazing vacation at the end of the year. and your spouse refuses to touch that unless it's for vacation. Or all your partner thinks about is how much they can lose. And all you think about is how much you gain. Big problem, right? It happens. It happens all the time. So this is where the teamwork begins.

Find a happy medium for that first and first. investment property. Again, agree on a number. And maybe both of your numbers are way off. And by this time, we collectively discussed the numbers and came to an agreement of one number. You know, that number could be $200 a month in passive income or like me. That number can be your son's college education in 10 years. So agree on that number. And then step two is agree on the strategy that's going to help us get to that number. The strategy could be a fix and flip. You can decide that I'm going to do one fix and flip to try it out.

I don't know if that would be my first suggestion to you as your first endeavor, but heck, you can jump in it. Or it could be finding a seller finance property that is going to contribute a passive income that you and your partner are going to put aside for a rainy day or for your kids' college education or for your retirement. Or you can find a turnkey operation that's going to provide a buy and hold for you and help you build a portfolio. Whatever it is, agree on a strategy that both you and your partner are going to execute

together. Okay? Next, agree on task and responsibilities within that strategy. So let's just say you guys are going to do a fix and flip. One of you are in charge of finding the property and negotiating the deal. The other one may be in charge of hiring the contractors. Define whatever it is that each of you are going to do together. there could be no overlay.

They could be input and you guys can share suggestions. But when one person is responsible for that task, it is that person's responsibility to take that task to fruition. Okay. Oh, very important. Stay in your own lane. You can ask your partner for advice, but ultimately you're the one in charge of the task. So you are not allowed to provide unsolicited advice to your partner that's in charge of a task. Stay in your own lane.

Trust me, this will produce amazing results. And your partner sometimes may not do what you would want them to do. But again, if your partner is in charge of a task, you can make suggestions, but you cannot make decisions if that is not your task. Approaching the investing through avenues of clarity provided by conversation and what you hope to accomplish with your investment puts both of you on equal footing because now you have a crystal clear vision of not only what each other's thoughts are, but of your fears, and your roles and everything.

And when it's communicated to each other, expectations placed on the table, it allows both of you a keen insight on each other's everything when it comes to investing. So there's no room for interpretation if it's discussed, and if each of you took a deep dive

into every aspect of real estate and creating passive income. Communication is key. Understanding each other is critical and teamwork is everything. Now, this is not to say there won't be upset or frustration throughout the journey of you doing this together. But the most important thing is really understanding each other's perspective of where you stand when it comes to real estate investing and creating passive income and respecting each other's point of view, then finding a happy medium. If you discuss it and you lay it all on the table and there's an upset or frustration arises, you can easily come to. back and revisit the conversation. So be clear when communicating every aspect of diving into real estate investing and creating

passive income in your world. You know, what you hope to accomplish and what your investments are may be different than what your spouse or your partner wants to do. But if you bring it together and you come to a happy medium, It's crazy what you can achieve together. This will be clarity for both of you. It will be something that you create together, and it's something that has the potential to be life-changing.

It will absolutely point your partnership into the right direction, and the upside is you can create financial freedom for it. Clarify your goals. set expectations with each other and really be open and understanding. And once you do that, everything else is a piece of cake. Investing should be a joint venture where both parties feel like each of you have an equal say. And each party should be heard equally. That's it for today.

As always, I hope this episode got your wheels to turn. I hope it provided clarity. And who knows, maybe you and your partner will get on the same page, not only to create financial freedom, but just to be stronger together. If you need help with any of these goals, or maybe you just need a little clarification on how to make it happen for your world, go to cashflow savvy.com, that's savvy with two Vs, and download the frustrated investors' guide to passive income. In that guide, there's a step-by-step process on how to create passive income in your world and how to make it happen in your partnership. It is a pleasure to connect with you every single week, and if you want to reach out to me, Send me an email.

I will absolutely respond. May take me a day, may take me five days, but I will get back to you. Mercedes at epic real estate.com. I look forward to hearing from you, and I look forward to seeing you next week. Have an epic week. Your portfolio has seen better days. But this two shall pass. And the best for you is yet to come.

Together, we'll get you there faster. We're cash flow savvy And we'd like to share some information with you That will show you how you can take control of your financial future And accelerate its arrival Go to cashflow savvy.com More building, less waiting Cashflow savvy.com

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