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Friday, May 29, 2009

Dancing with the Prom Queen

I am sitting in my sun room contemplating the path I have chosen to follow. While in Orange County today I noticed one of my friends has a very expensive brand new Mercedes. A very nice car indeed. As much as I would like to drive such a vehicle, I can't really imagine myself ever driving a car that expensive even if I did have the burnable cash. So I have been thinking that maybe because I don't picture myself with such luxuries, does that affect my ability to afford them? Is it really true that we actually can think ourselves rich?

There have been many opportunities to purchase such frivolous items. Once, I closed a deal that netted me $40K so on the urgings of my wife, we went down and test drove a nice two-seater at Fletcher Jones. After I finished driving it around the block I handed the keys to my wife and told her to take it for a test drive. She didn't want to because she was afraid of damaging it. I told her she really should take it out because as long as she was with me, it was her last opportunity to ever drive one again. The salesman just looked at me with his jaw hanging open like a trout. I just couldn’t part with that much cash for a hunk of metal that I would drive around in to look at beat up old houses. My Gram trained me wisely. She used to say expensive cars are for every body else to enjoy and I believe she is right. I don’t need to stroke my ego with a car that is going to end up as a piece of junk some day. I would rather parlay that cash into another rental home.

I see my friends in other businesses far exceeding my current position. I know my assets will out live the income from their companies. The day they stop showing up and unlocking the door is the day the checks stop showing up in the mail box for them. I believe this is what drives me to keep rolling my snowball.

I try to live a frugal life. I scan over my credit card statement every month to see where I could have saved money. I don't eat out very often. I don't hardly ever carry cash on me and I am terrified of ATM machines. I give my dogs 1/2 a biscuit each instead of a whole one. I use old jars as cups. I recycle my dental floss. Just kinding. That is way too disgusting. I think I will post to my mastermind group about frugality and see just how cheap we are collectively. You want to talk green? Just hang out with a group of real estate investors. We recycle everything!

However, I am waiting for that Mike C day. Just when I think I have made yet another outrageous decision, the clarity hits me that I am no longer required to play the game. I can stop going in circles and sit on the sidelines if I choose. I can buy that pizza joint if I want or open that bar just for fun.

Real estate investing is an amazing...job?, profession?, life path? I don't know what to actually call it. A hobby that has the potential to pay well I guess. I have seen no other business that can provide you with such sweeping life changing moments the way putting together a fine tuned real estate deal can. I don't know if it is addicting or just the hard driven desire to achieve my goals that keeps me searching for the next deal. I noticed recently during a slow period, that I was actually depressed because I didn't have any deals lined up for escrow. I had a sort of fear about where and when the next deal would come. Sure enough though a deal comes along that is so amazing I can't even believe I am the one that did it! Trying to comprehend the sheer concept of such a great deal leaves me at pause. I have read books about buying such properties and to actually do it is such an awesome feeling. Of course, I have purchased properties sub2 in the past and I will even go so far as saying more than a few. I once bought a house sub2 $700K in loans so $178K is nothing scary. It is the terms that make this such a killer deal. A very good friend of mine said buying a rental property in Orange County is like dancing with the prom queen.

I would rather have 10 such properties in Orange County than 20 better ones in Riverside. Maybe even 30. I truly enjoy living in Riverside, but Orange County is one of those special places to live. There are few places on Earth that provide such an unmatched quality and opportunity in life.

Back to thinking yourself rich for a moment; I can see myself in a place where I will no longer need to raise the capital from private investors to do deals or be overly concerned if I don't have XX amount of income lined up. But I want to enjoy being here today. I don't want to wish my present away. Outside of all the crap that goes on in the World (I try not to watch the news, but can’t help to check out the Drudge Report every so often) just being here in California and having the people that I have surrounded myself with is an absolute paradise every day.

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