Why Pretty Properties Don't Always Give You Cash Flow

But I'd love for you to share some type of get real moment, whether it's business or real estate or even your personal life that will just allow others to kind of understand that, hey, it's not always rainbows and sunshine. We all go through challenges and we all eventually get over them.

I would say as an investor, I made an early mistake. The first time I ever bought property across state lines, it was in Crowley, Texas, which is just south of Fort Worth. There's nothing wrong with the Crowley market, but I got so enamored of buying this place. My first ever out of state turnkey property. You know why? You know, the mistake I made? It looked pretty. Just because it looked pretty and it was cheap and it looked pretty. It was a brick single family home. I paid 153k for it despite the fact that before I bought it, the property manager that I was going to use in that market told me, hey, they don't think that's a good property for whatever reason. And I never found out why. But for whatever reason we don't think we're going to be able to keep that one occupied. I bought it anyway. I was like 153k, even though there was someone with local market knowledge right there that told me not to buy it because they couldn't keep it rented. I just thought, it's only 153k for a brick property. I'll buy that. I could never keep it occupied for whatever reason. It was actually a failure. My first ever out of state turnkey property and I sold it because I couldn't keep it occupied. Now I did sell it for 165k a couple years later. Just a little bit more than what I bought it for. But after aging commissions and anything, I didn't make any gain. But you know, it wasn't a complete tragedy. But really the lesson that I got from this is the market is more important than the property and your team, especially that property manager, that's actually more important than the property itself. So, you know, I got a hard lesson. You know, I ended up losing my time on that deal and I didn't make any money so I wouldn't get emotional about this thing is not about emotions. If I and my wife are going to live in the brick home ourselves. Oh, okay. Well, maybe it matters that it looks pretty, but it does not have to look pretty to be profitable. In fact, there's almost a negative correlation there for long term rentals. If a property looks too pretty and it's in too good of A neighborhood, it often doesn't cash flow either. So those are some of the lessons that I learned on that. And really, just about every one of my turnkey rentals I bought since then have been winners. Danny and Flip.

Oh, I love that. So I love the lessons learned because that's really what helps people move past the mistake. Right. Is when we can share what happened, what we learned, so that now they don't have to make the same mistake. So thank you so much.

Investing should be about facts and numbers, not emotions. I might have emotions in my, my own home, but yeah, that has no place in my investment. So, yeah, that was the. The lesson learned. Yeah. Don't fall in love with a pretty property. Pretty does not matter in a long term rental.

That's right.

Pretty does not rent.

Yeah.

Yeah.

Just because it's pretty doesn't mean it cash flows. That's awesome. Yep. I love it. Okay, so now I'd like to really dig into your, what I like to call your superpower. So I say superpower because it tends to be either a passion of somebody or the career, successful career somebody has done. So when we asked you about this, Keith, you actually sent us a note that physical fitness is prioritized over finances. And I thought this was really, really interesting because I follow you on social media and I watch your YouTube videos, I listen to your podcast. I'm on Facebook most often. So I. What I really, really love is when I get to see you, you know, running up a mountain or I think you just posted like, it's ski season. I see videos. There was one. It was late at night. You were in your garage doing this one and you were balancing. I was like, I think I commented. I was like, oh, I totally want to try that now that I saw you do it. So I love that you said this. I'd love for you to dig into that a little bit more and maybe let us know, like, how you began.

Yeah, well, I mean, I've been doing cross country ski races since I was nine years old. So, you know, my father, my parents always instilled in me the importance of physical fitness. And I don't think that everyone has to do things the way that I do them. But to me, in the United States, where we live, money is falling out of the sky. I mean, you almost have to use an umbrella to keep the dollars from hitting you. They're just always, you know, falling down out of the sky. So in, in my opinion, like, finances is easy, but fitness is difficult. And I want to prioritize Fitness because I'd rather take care of my own body than take care of my wallet. I mean, my wallet can come after my body, but I'm only ever going to have one body and so does you, the viewer or listener. So that's why I prioritize things like I do. And I like to do it in the morning because that way it's done. And it also keeps your metabolic rate higher throughout the day if you exercise early in the morning. And I, yeah, as you've seen, I do some pretty intense exercise. So if you ask me what my superpower is, I guess I do have this motivation that comes from within. I don't need to have a personal trainer that pushes me. I can just find the energy myself. But yeah, it's true. People know me and look to me for, you know, real estate, investing guidance. But in my personal life, I prioritize fitness first and then finances second. That doesn't mean that anyone else has to do it that way. That's what works for me. And, you know, I found that when I have business or investing problems, I still feel good about myself because I've still got this same body that I have. But, you know, when my business is going bad, if I didn't feel good about my body either, gosh, I might really fall into a really sad mood or something like that. So, yeah, I prioritize fitness over finances. And those are just a few of the, the reasons why I love that.

I especially love the do it in the morning Flip and I have found, and obviously we don't work out as much as you do. Everybody can see our soft, fluffy shells that we are trying to get rid of bit by bit by being, you know, having healthier eating and good practices. But we have found if we do not work out in the morning, then it's, it's likely not going to get done at all. So above and beyond that metabolic rate and keeping it high, it gets pushed off by business or something else and then it gets away from us. And here we are today. So I think for me, that was probably your biggest tip, is just reminding us, hey, prioritize this first because your body is the one body you have in this lifetime and it's important. Get in there, take care of it, and then you can do business and let the money fall all over.

Yes, try to keep it from hitting you in the head. Foreign.

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