Hey friend, Kris Krohn here. And today, I’m
going to be sharing with you the 5 things I wish I knew before I started
investing in real estate. So, I’m so excited. I mean if you’re
watching this video, it means that you’re fully committed to getting started in
the game of real estate. What I want you to understand is don’t screw up.
Like I don’t want to make you nervous, I don’t want to make you scared. But it is
so important to make sure you have guidance on your first several
properties because you don’t know what you don’t know. You don’t even know that
you don’t know that you don’t know, right? So, what I want to do is I want to kind
of help you out on this journey and say, “Man, when I start in the beginning, what
are some things I wish I knew that would have helped me slept better at night and
help me had a way better kind of rich into the experience.” So, number 1, Swan. I wish I had a really pretty Swan. No, it stands for a Sleep Well At Night account.
Okay? Bank account. Meaning, if you’re going to do a property, it’s important to
make sure that you fund your bank account. This is a business. There will be
expenses and you don’t know when they’re going to come up. So, you might be thinking, “But Kris, if I buy a property and I’m holding it, the rental income should
cover expenses.” Absolutely. And you don’t know what you don’t know yet. Like when I buy a property with a partner that’s never done real estate before, I put $10,000 in the account on just the first property. And another 5 on
the second. Now, that’s over the top. But the last thing you want to do is get in
on a property, have an expense come up that you didn’t expect because you’re
new to the game and they get freaking stressed out because you don’t have
enough money to handle it. I just recommend it being a little overcautious
in the beginning. it’ll help you feel a lot better when you get in the game. The
next thing that I wish I had known is that the perfect property is a myth. The
perfect property does not exist. Like what you’re looking for is good deals
that meet your criteria. If you’re waiting for the perfect one, dude it may
never come along. And then that becomes your reason an excuse why you’re not out
there crushing it in the game of real estate. You know for me, I got standards.
My standards are if I’m going to do a deal, it has to show me potential for 20% annual ROI. 20%. That means that I can double my money every 5
years. Now, those are high standards because a lot of people are only
shooting at 5 and 10 percent. Because they just want to beat the market. But
for me? Come on, I’ve done 3,000 deals. I’m an expert at this. I want the best of the
best. And some of my deals even get up to 30%. So, when you know what a good deal is, take action on it and pounce on it. It’s not about… You know, winning the lottery
making a million on one deal. It’s about sustainability
and staying in the game until you win the race. When we talk about ROI, it’s
really important for you to understand that strong management is really go
tell the rest of the story. Did this work out for you? Did you make money? Did you lose money? Here’s what strong management means. Number 1, pick the right tenants.
You got the wrong people, you got to get them out of the property. Don’t put them
in there in the first place. And number 2, you’ve got to have the right exit.
Which is, do you know how long you’re going to hold the property and do you know the right time to sell? If the market goes down, it’s a good time to rent, not a
good time to sell, you’re going to lose money. Makes sense? And similarly, when the market is going up and you’ve made all your gains, don’t be that stupid guy that
thinks, “It’s going to keep going up, I’m going to keep making money.” You got to get educated and surround yourself with people that understand the market. And
you got to get out. You want to make the first money that the market makes and
climbing up. Not the last money. Because guess what happens when it goes over the cliff again? Yeah, you’re in big trouble. You don’t want to be that guy. The next
thing that I wish I had known that would have really made a big difference in my
bank account, you know what I wish I had known? Leave the slumming to the
slumlords. Do not buy crappy property in bad parts of town. I mean you can if you
want. Maybe it’s a specific strategy that you’re tapping into. But for me, I’m going to tell you right now, I want to be on the right side of the railroad tracks. I want
to be in the place that is the path of progress where families want to be.
Entry-level real estate, under the median. That’s the nice stuff. That doesn’t mean
the expensive stuff. But it means I want the stuff that would attract the right
families. You attract the wrong kind of person to get into your home and guess
what they’re going to do? They’re going to beat the trash out of it and that is not what
you need is an investor. Unnecessary expenses. You want someone that goes in there. And I’m going to give you a little secret right now. The more money they
make, the more they’re go take care of the property. So true. It’s kind of wild
actually. But you’ll notice that I pick markets where I can go in and I can buy
properties where the people could afford twice as much house. Because guess what? I don’t have to evict those people/ The last thing that I would share is
probably the most important. You need to be prepared for the unexpected. When
you’re new to the game, you’re going to have a learning curve. Doesn’t mean that
you’re going to necessarily lose money. But you have an opportunity to lose your
wits. And some people don’t realize that this is a… This is a
of math and ones and zeros. But when you’re new to the game, it’s crazy
emotional for you. And that’s not what you want. You don’t want this to become
an emotional game. If it’s an emotional game, then I can flash you bricks of
money. I can show you piles of money. And all of a sudden, it’s like you see this?
And you’re like, “I’m getting excited.” And then I take it away and then you get
really sad. No, you need to understand the game a real estate that part of making a
lot of money is having expenses that you don’t expect. And here, I’m actually
talking about your emotional well-being. Because if you don’t know how to handle
an unintended and unexpected financial cost of something, the more you poopoo
your real estate, the more you get negative on it, the more you get down on
it, the more you call it a bad day, you’re about to become adult water and someone else is going to take that property off your hands and make the same awesome
amount of money you could have. But you lost sight of the goal. Do not do that.
You need to understand that if you’re going told the property for 1,500 days,
it’s going to have 1490 great days. And it’s going to have 10 really bad days. But it’s
not really bad days. It’s real estate doing real estate does to make you a lot
of money. So, here’s my advice. When something bad happens as in I lost money because of something unexpected, I want you to have a positive attitude that
says, “Hmm, I’m learning. What am i learning? How is this helping me become more wise, more intelligent so I can be more prepared in my future?” If you’re prepared
for the unexpected, it’s really going to help you because everything’s unexpected
when you’re new in the game. And a weak mind is going to get washed out to see. You my friend, just this alone, these are the things
that I wish I had when I started the game. And this is just the beginning of
the list. Subscribe to this channel so every day I can drop a nugget of
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