Today, I wanted to let you know about my journey to primarily investing in real estate v the traditional places, like stocks, bonds and mutual funds. I’ve always had a fascination with real estate projects, but I never really did anything until I read a book called “Multiple Streams of Income: How to Generate a Lifetime of Unlimited Wealth!” authored by Robert G. Allen. If you want to buy this book, it’s easy to find in hard cover, paperback, audiobook and kindle. Here is the simple concept that I became aware of. ALL of my personal income was directly related to the hours I spent doing work for someone else and the financial health of that one company. Now at the time, I was working for ION Geophysical. This company makes money when energy companies want to look for more oil and gas. I already had been through two downturns that hit the company very hard and I’ve lived most of my life in Houston, so I knew how cyclical the energy industry is. So, I realized that financially, no matter how much money I have saved up, my income stream was at significant risk.
Now, once I realized that, I looked at all the examples in the book of ways to create some passive income and decided that real estate was for me. I started reading more books on real estate and listening to real estate podcasts in the car. I basically went on an education binge. By late 2016, I found a model where you build cash flow by creating what are commonly called sandwich leases with single family houses. However, after trying that model for quite a few months, I found that it just didn’t work for me. I’m not saying that model isn’t sound because a lot people do very well at it. It just wasn’t for me. I would definitely say I “failed” at that business. But what I’ve learned is that the more and faster you fail, the faster you will create something that works. Keep in mind that while trying to start this business I was working a full-time job where I generally worked 10 hours a day on average.
2017 was an interesting year for me. I found a guy named Mark Podolsky, The LandGeek, and really liked his model of creating passive income streams with raw land. I’ll get to the details of this in future emails. This looked more like a business I could work on in the evenings and be successful. However, soon after I found Mark and started having success with his model, I stopped because I came across a better opportunity with my brother, Mike. For about 3 months during the summer of 2017, we tried to raise capital to buy an existing midstream gas gathering system in New Mexico. We were working with an investment bank and numerous private equity firms to put the money together and get the deal done. We were raising money in the 8-figure range and it was exciting. Again, I had a full-time job, so I was doing this by meeting people for lunch and dinner to discuss and negotiate the deal. It wasn’t easy. In the end, we were one of two final bidders considered by the seller, but lost the deal. We learned a ton going through that process, made a lot of great connections and made plans for watching that marketplace for more opportunities in the future.
By this time, it was the Fall of 2017 and I went back to the land business. On October 1, 2017, I started following the plan the way Mark and his partners teach it and never looked back. Over 2018, I had success and started building up a passive stream of income and even had a few different virtual assistants working for me and doing most of the work for me. This business model did prove out to be easy to handle for an hour or two per day in the evenings. Like I said, in some future emails I’ll explain how this business model works.
The concept of multiple streams of income really hit home in late 2017 and early 2018 when the Company I was working for was sold and the new buyer of the company decided to close down the headquarters office where I worked. That company I worked for was Omega Protein Corp. I saw the potential for closing the headquarters office early and was getting prepared. But the land business wasn’t built up enough yet to support us. At the beginning of 2019, I took my current job. But I have kept on working on building the land business. It has evolved over time to suite me and growing quite nicely.
Starting in late 2019, I started wanting to expand into other types of real estate. Moving into 2020, I am executing on that plan and I will get into that in future emails and talk about what I plan to do.
For now, be safe and take care of your family.