Rich Dad Poor Dad To The Rescue!
I pulled into my favorite dirt parking spot at Daffin Park. Ray and some of the others were already ahead of me setting up the net, the music, and cracking some fresh beers. Geez, Ray’s truck is obnoxious, I think to myself. It’s one of those Dually Chevy F5000s – I don’t know what it’s called. Doesn’t matter.
It’s a Friday in mid-March, so the weather in Savannah is just perfect for some beach volleyball. After a few games, we head to the park benches to relax and catch our breath. Ray mentions to me that he closed on another home and I asked him jokingly, “How many houses do you need, man?” At that point, he had purchased 4 single family homes – one of which he was living in with 4 roommates (aka House Hacking). The others had tenants in them already, but I didn’t quite understand why.
I also couldn’t understand how Ray could be frolicking around on a beach volleyball court with 4 mortgages to pay! Shouldn’t he be working like 3 jobs!? I mean I outrank the guy and I’m sweating just thinking about all his bills. After our second (or third) beer – who’s counting anyway – I asked him how he wasn’t nervous about his tremendous debt. He replied coolly, “It’s all good man cause this is Good Debt.”
Let’s stop here for a second people. To all the readers out there, please keep in mind that I am a college educated, professional scientist who literally gets paid by the United States Air Force to crunch numbers, and at this point, I had never heard of GOOD debt.
So I pressed, “What in the hell are you talking about? What is good debt? Isn’t all debt bad?” The gears of logic in my head began turning, “I have a car payment and that is debt. That debt sucks. It’s not GOOD. I wish I didn’t have to pay on that every month. He’s got to be messing with me here.” Just as he began to explain everything we were called over to join another spirited beach volleyball match (picture Top Gun minus Kenny Loggins and the ridiculously tight jeans).
Fast forward a few hours – the sun is setting, the coolers are dry, and we are tearing down the net. Before we split, Ray reaches into the back seat of his obnoxious F5000 SuperDutyHeavyLifter, digs around a bit, and pulls out a tiny, fat, purple paperback entitled, Rich Dad Poor Dad. He looked back, tossed it to me, and firmly instructed, “Read it.”
So You Read A Book – Cool Story Bro…
As I’m writing this story, I can see that it may be hard to believe exactly how one small book could have such a profound effect on someone’s life.
Well, it did.
I started reading that night. By Sunday, after navigating through Ray’s errant underlining and endless margin notes, I had finished. The primary takeaway – without ruining the book for those who haven’t joined Kiyosaki’s CashFlow Cult (relax it’s not a real thing, I don’t think – although I’d be open to it) – was learning the difference between a Liability and an Asset.
In less than 300 pages, Kiyosaki turns the conventional model of go to a good school, get a good job, buy a house, work for 30 years, and retire completely on its head! He teaches readers how the majority of Americans spend way more than they actually make – and most of the expenses are on what he calls, “Doo-Dads.” and how instead we should be focusing on creating residual, or passive, income. Much like this blog post, Rich Dad Poor Dad truly was an enlightening read. In all seriousness, I can barely write. Remember, I’m a scientist. And a Real Estate Investor, but more on that later.
My First Deal
After reading Rich Dad Poor Dad, I was hooked. I began reading and listening to everything real estate that I could get my hands on. I discovered the path to financial freedom and figured out two things:
1). I don’t have to stay in the Air Force for 16 more years if I don’t want to and 2). I can build 10x more wealth than my pension could offer me in 16 years through real estate investing.
Soon I began networking too. To the extreme displeasure of both of our girlfriends at the time, Ray and I became inseparable. All we talked about was real estate. They were not amused. But, about 6 weeks after reading Rich Dad Poor Dad for the first time I had met some house flippers, some lenders, a real estate agent, a property manager, and a bunch of other investors.
I also made my first offer on a Triplex – it didn’t pan out, but I made it so that’s what counts. I spent my time in between meetings at work scouring Trulia and Zillow. My lunch breaks were spent driving for dollars. Weekday nights – reading/listening to podcasts in Automobile University. Weekends? I slept in and hung out with friends – I’m not a robot, people, geez!
One day while I was at the office, I found a Quadplex (4 Units) that had just been listed on the MLS. It was about a 5-minute drive from Hunter Army Airfield, so I swung by to take a look over my lunch break.
It looked good.
Nice, large, brick building with individual power meters, HVAC, in a quiet neighborhood, close to major employers in the city. Right in my wheelhouse! Better yet, I drove down the block and noticed the entire street was full of similar Quadplexes. Some were being worked on, others were not. I called my agent and had him run down some more information. Then I called my lender and told him about the deal and how I wanted to use my VA to purchase the property. I already knew that I could use my VA entitlement on a property up to 4 units. I knew I had to live in one of the units, which was no problem for me since I was on a month to month lease in my current apartment. However, I also knew that I would be PCSing within about 4 months from when I would close on the deal. I didn’t have orders, but I had a feeling. My time in Savannah was up, and the Air Force likes to move its meteorologists around – especially since we are spread very thin across every Air Force and Army flying unit in the DoD. So, I worked with my agent and put in some offers. They countered. I countered back. They countered, and finally, we came to an agreement. I signed the contract and just like that, my second career as a Real Estate Investor began.
Kevin Brenner is an Active Duty Air Force Captain. He has an expanding portfolio of rentals and has started his own DC area REIA. He is an ADPI Hero and an recurring contributor to the ADPI Blog!
