One of the first questions I ask new Minneapolis duplex investors is, “What’s your Z?”
Their response is always little more than a blank stare. So I clarify.
“At the end of your life, what do you want real estate investment to have done for you?”
Truth is, most new investors have thought about the first step, the letter A.
But they haven’t thought about the rest of their investment alphabet, let alone their final destination.
Most of us want real estate investment to provide some sort of supplemental income in retirement, but we haven’t completely thought about how much money we’ll need, what we want our daily lives to look like, or just exactly how we’re going to get there.
When we think about our end goal; defining and answering what the end of our individual alphabets to be, we can work backwards and begin to design a road map to get there.
For example, most of us don’t fantasize about spending our 70s and 80s repainting vacant duplex units or answering late-night plumbing calls from tenants.
Rather, we imagine money showing up in our mailboxes while we’re out travelling or playing golf somewhere where it’s warm in January.
In order to do that, odds are we’re going to need a bigger property; one that cash flows well enough to pay for its own management.
And big properties require big down payments.
The question then becomes, what are you going to do today, to make sure you have that money later?
Do you take a duplex’s positive cash flow now, to supplement your lifestyle? Or do you invest in a duplex that has less cash flow but a more stable neighborhood? Do you flip a few properties to grow your nest egg? Or, do you cut some things out of your life in
The answer is different for everybody. But you can’t come up with it until you know your Z.
When you’re ready, I’d be happy to help you map a road to get there.