How to Get Your Spouse On Board With Real Estate Investing
For this post, we’ve brought back my lovely wife Kristen, the Real Estate Rookie! She’s put together a great look at what it takes to get you and your spouse on the same page when it comes to real estate investing.
One of the most common questions Nate gets asked is: “How did you get your wife on board with real estate investing?” So let me go ahead and tell you from my perspective what this journey has been like so far.
Tackling adventures together is not something that is new to us as a married couple. We love traveling to new places and experiencing new things, especially hiking in the national parks. We had always talked about hiking Half Dome but I wasn’t sure if this was something we would ever actually do. But this guy was able to convince me to leave 2 babies behind, fly across the country, fully commit to the wilderness for 2 full days, and hike to the top of Half Dome at Yosemite National Park. If you are not familiar with this trek, it is an extremely strenuous hike that covers over 17 miles and 4800 feet of elevation gain (that’s almost 500 flights of stairs). The iconic part of the hike is the last 400 feet with a nearly vertical ascent up the granite dome via the cables. While most people are interested in this trail to check off a “bucket list” item, I don’t want to minimize the fact that people have died while trying to complete this hike (believe me, this weighed on me heavily before going!). The cables at the top can be very treacherous, particularly in suboptimal weather. While the thought of doing this was daunting, it was a hike we had talked about doing together for several years. For us, investing in real estate was a similar situation. Here are the 5 things that help me get more on board with a new adventure:
1. Be prepared
Not just anyone can just go to Yosemite National Park and decide to summit Half Dome at their leisure. It requires careful planning and preparation. First, the National Park Service only gives out so many permits via a lottery system to climb the cables. Second, it took physical training to feel physically and mentally capable to accomplish this journey (believe me, there were actually blood, sweat, AND tears that went into that hike!). To give some perspective, my Fitbit tracked over 31 miles and 700 active minutes between the 2 days to complete the hike. This was also while carrying a 35-pound pack on my back (and no previous backpacking experience). Just as I knew when we booked this trip that I needed to dedicate a lot more time and energy to becoming physically fit and acquiring the proper gear, I knew when we became interested in real estate investing that I had to do my due diligence. If you or your spouse are a type A, risk-averse person such as myself (maybe even a pharmacist?), you understand the desire to gather as much information as possible to feel comfortable making a decision. However, when you search for resources on real estate investing it can be overwhelming with where to start. So what resources did I start with?
Books: I would advocate that the number one resource to open my mind to real estate investing was the book called “The Book on Rental Property Investing” by Brandon Turner. I think by page 10 I was ready to commit. This book got me excited to start our journey in real estate investing, and also made it a little less “scary” sounding. Another book that changed my perspective was “Rich Dad Poor Dad” by Robert Kiyosaki. If you are not familiar with this one, it is a financial education book that can shape the way you think about wealth building and investing. Nate had talked about this book for a few years, and I almost felt bad that it took me so long to read it. I’m sure there are several other great books available, but I found these two as a very helpful starting point for me. As a side note – I can’t personally stay awake to read a book for more than 2 minutes, so I invested in an Audible subscription to maximize my time during my commute to and from work. Additionally, it was also enjoyable for me to know that Nate had already read these books and that we could have meaningful discussions about what I had “read” that day. So, if you are trying to convince your partner to get on board, I would recommend that you also read anything that you are suggesting to him/her.
Podcasts: Two words: “Bigger Pockets.” If you have started looking into real estate investing, I’m sure you are familiar with this resource and the podcast they produce. I felt like I gained a lot of valuable insight by listening to investors and their first-hand experiences. I loved learning about other people’s perspectives, their favorite books/resources, the mistakes they made, or things they would have done differently, and even the things that unexpectedly went really well. I think listening to several of these also reinforced to me that there is a lot of potential and opportunity in real estate, and at the same time it’s OK if something does not go as planned. I honestly don’t think there is a bad episode of the Bigger Pockets podcast, so subscribe/download and chose whichever ones sound interesting to you. While I thought the podcast was a great place to jump in, this is also just the tip of the iceberg with the Bigger Pockets resources available – there are lots of other options including books, webinars, forums, and even a conference. There is also a new podcast called “Real Estate Rookie” which may be a good place to start as most of the people they interview are just starting out and maybe in the same shoes as you.
Running the numbers: in pharmacy school, one of the best ways to reinforce a concept was by doing a real-life example (hello, aliquot calculations). The same holds true for real estate investing. There are lots of different ways to invest in real estate, and for our first property, we were interested in a single-family home or duplex to rent. There are several calculations to use to help you determine the impact of your investment; one of those is cash flow or the amount of money you would expect to bring in after all expenses are paid each month. Something I became interested in helping with was learning how to analyze deals. The great thing is that you can practice as many as you want, and it obviously does not cost you anything more than time. By running the numbers, it helped me feel more confident in whether or not we were making a “smart” investment. While no one can predict the future of investments, I personally found doing this helpful so I understood the process, costs, and expectations. I enjoy scrolling Zillow as much as the next person, but it also made it so I could quickly look at a property and know whether or not it may have been worth our time to see in person. Since buying real estate obviously is not a small purchase, this made me a little more confident and felt like I knew what I was doing (at least on paper). If your significant other needs a more detail-oriented approach to real estate investing (vs a broad, general vision) this may be a good idea to help get him/her involved.
2. Rely on your team
Because of the lottery system, we actually decided to obtain our permits through a company that could procure the wilderness permits needed to both backpack in Yosemite and climb the cables. We did a 3 day (2 night) backpacking trip with a guide and 2 other travelers. We split up shared gear and food between our packs. We relied on our guide and her previous experiences. We all made it up and down Half Dome together. Just like this hike, and really most things in life, in order to have a positive and successful experience, you need to have the right players on your team. Obviously you and your spouse will want to be on the same page. Nate and I have been doing our monthly budget together since we got engaged and moved in together. Having both of us involved in our finances allows us to have open communication about our spending, financial goals, and keeps both of us accountable and informed. Another huge member of our team is YFP Planning, who we use for our financial planning. I cannot give enough praise for the entire team at YFP and the services they provide. Since we have started working with them, we have become a lot more confident with our financial health and even general well-being. During one of our initial meetings, Tim talked through both our financial and personal goals – and both hiking Half Dome and investing in real estate were on those lists. The team at YFP Planning has helped to make sure we are taking financially responsible steps to achieve our goals. Other important members of your team may also include a knowledgeable realtor, lender, insurance agent, etc. If you and your spouse are not on the same page about real estate investing, it is important to have open and honest communication. If you do not already do so, consider doing a monthly budget and defining your goals together. A financial planner should be a collaborative and objective voice in helping you reach those goals. If you and your spouse ultimately decide together that investing in real estate is right for both of you, the other players can be added along the way.
3. Watch out for bears
Being the worrier that I am, not only did I struggle with the idea of falling from the cables, I also feared for the possibility of an encounter with one of Yosemite’s many bears. Lo, and behold we did not run into just one bear, but three! And it was OK… and most of the time it will be! You do what you can to prevent them, like taking the proper precautions with storing food in bear canisters, walking “largely” in a group of people, and doing the courtesy of warning other hikers in the area of your sightings. In real estate, things won’t always go smoothly, and that is OK too. Do your research, understand the market, be willing to change your course if needed, and collaborate with others. Encounters with bears are not a bad thing if you are ready for them; and if you do meet a bear it makes your journey that much more memorable. If your spouse is extra worried about “bears,” show them all of the prep work you have done. Bear canisters equal spreadsheets, traveling in large groups is forming your Rockstar team. You may need to plan an alternate route but that does not mean your destination needs to change.
4. You have to be ready to just do it
When we finally made it to the top of the sub dome with the start of the cables, the nerves really started to set in. It only takes about 30 minutes to climb the cables to the top of Half Dome, so after hours of hiking to get to this point, I knew I couldn’t quit. I had looked at pictures and watched videos trying to visualize myself in the situation, but words can’t describe the feelings I had as I approached the cables and grasped them in preparation to start my ascent. When it came down to it I knew I just had to jump in, put one foot in front of the other, remember to breathe, and have a really sturdy grip! Real estate investing has been very similar. Something that resonated with me from all of my research (particularly with most of the Bigger Pocket podcasts I listened to) was the countless number of times that someone said “you just have to do that first deal”. Nate and I eventually realized we were at a point that we felt fairly confident in analyzing deals and the market we were looking in, and we ultimately decided that we would pull the trigger when we found a property that cash-flowed anything in the positives. Some people would probably say this is crazy – there are definitely better “numbers” to look for but we decided we didn’t want to be stagnant and sit around waiting for the absolute best deal to come around. Believe me, more than anything I wanted to outreach to Brandon Turner and ask him to analyze the property and make sure we were making a smart investment. Putting in the offer was an uncomfortable, unnerving feeling. Having the offer accepted caused even more heartburn and panic. But we also knew we did our homework and we were as prepared as we could be. Doing that first deal will be the ultimate preparation and will get you feeling “ready” to take on others. Real estate investing is a long term play; it is not a “get rich quick” scheme (you will also hear this multiple times on Bigger Pockets). If you have made it this far and are struggling to start your climb – grab your Tums as there is only so much prep work you can do. If your spouse is hesitant to invest in real estate because of the fears that come with jumping in and trying something new, just remember it’s the first step in a long investment journey.
5. In the end, it has to be something that excites you
I can honestly say hiking Half Dome was an unforgettable adventure and an extraordinary journey with my husband; no words or pictures will ever be able to fully depict the experience. However, I realize that this adventure may not be for everyone. The same may be true with real estate investing. I tell you everything above to also paint a picture of what our relationship is like. At the risk of sounding too mushy, one of the things I love about Nate and one of the many reasons why I married him is his passion for adventure and living a full life, and his ability to get me out of my comfort zone to enjoy an adventurous, full life with him. Undertaking new experiences and learning to navigate challenges together are things that we enjoy doing as a couple and they keep our relationship strong; real estate investing is one of those things. We had talked about doing it for several years but I was definitely the one more anxious and hesitant to begin that journey. While climbing Half Dome and real estate investing both intimidated me, I didn’t want that to hold us back from pursuing the opportunities and goals we talked about achieving together as husband and wife. New adventures can be scary, overwhelming, and intimidating. You may focus on what can go wrong, the scarcity of resources (like time, money, or a “good deal”), or just the uncertainty of it all. Or, you can choose to focus on the things that can go right, the opportunities you may be missing out on if you don’t take chances, and the challenges that may make life more fulfilling. While I will admit it can sometimes be difficult to look past the feelings of anxiety and uncertainty, the latter is what excites me and motivates me personally. I am relieved that in the end, I was able to overcome my hesitations.
Just remember to breathe and take one step at a time.