Hey friends. Kris Krohn here and today we're talking about the good the bad and
the ugly of real estate investing. This is our partner series. And so, when I
partner with people i love to set the right kind of expectations. And i'm also
showing you how to partner with others. So, if you're watching for that purpose,
once you understand, you shouldn't sugarcoat things. You should paint the
picture the way it is.
The day will come when that property does something you don't want it to. And
it's interesting because, you know, on a short-term whole if we hold a home let's
say for a thousand days. right? Three years. It's going to behave almost all the
time. But it might have that moment where it
doesn't. I'm not telling you it's going to misbehave on every property over a
five-year period of time. But at some point, if you have 3, 4, 5
properties, you're going to have one sooner or later that does something you don't
want it to. And it could be month one. But if you buy 3, 4, 5 homes, it
usually happens a couple years in. And it's where there's an unexpected repair
because of something the tenant did to the house. You might have to do paint, you
might have to do carpet. And the reality is, we've spoken about our Sleep Well at
Night account. We're funding our bank account with enough money so that we've
got enough to handle whatever that looks like. The nice thing about all the
properties that I've done is that we are able to backtrack in our markets and say,
"What our repairs that we project and what our repairs that we think will
happen? What our vacancies?" What we can do is we can account for as many of the
expenses as possible that are in the ordinary. But we're prepared for the out
of the ordinary. The out of the ordinary doesn't happen hardly at all. But when it
does, it is something that you need to get prepared for. You need to be mentally
prepared, you got to be financially prepared. The mental preparedness is
coming out to my event connecting with me and having a relationship with me and
getting my mind set trainings. And get that mentorship with me but on the other
hand it's also about being financially prepared. And we don't put money up for
putting 20% on a deal unless we also have the ability to fund the
bank account appropriately. So, we always look at everything holistic. So, that
we're actually thinking so far down the road that we're making a financial
decision today for 4 years from now. That's how far ahead. We are
thinking in decades. And that's because some of you are going to partner for 10
years. Some of you want to work with me for for two decades. And that's because
you want to go from a little bit of money to a lot of money and from a lot
of money to building a legacy. So, we think long-term so that we can build
real sustainable freedom. Real long-term wealth that can treat us well. You just
got to make sure that you're mentally prepared for it. Because financially, we
will be, if we're partnered together. If you're going to partner with someone else, I
recommend $10,000 on your first single-family home, price below the
median. And I put an extra 5,000 every time after until my count has
about $25,000 , $20,000 and knowing you're going to find
that is an obscene enough amount to cover everything that that portfolio is
going to need. Now, once we have the LLC that has maybe 4, 5, 6, 7 homes
in it. And we've funded it appropriately then we're going to start another LLC and
we're going to create separation from this entity to that entity. And then we're
going to refund our Sleep Well at Night accounts. Basically what I'm letting you
know is that when real estate does something you don't like. When it is
vacant longer than you want it to be. When someone beats up on the house. These
things don't take place very often. But I want you to know that we've built it
into the business and we expect it. It's not a negative, it's not a bad day. We
don't get angry about it, we don't get frustrated, perturbed, irritated, annoyed.
We 100% understand that that is part of making a lot of money. I had
years ago sat down with a client of mine that I bought two homes. And they had
bought in one of my strategic markets. And a few years into the process, they
sat down with me and they said "Kris, were so stressed." I said, "Tell me about it
guys." They're like, "Well, we bought these homes we've never been in debt before. We
mortgaged their house to do this. Now we have a debt on our house. We got debt on
these two homes. I mean we're just not sleeping well. We're really concerned." I
said, "Okay, we'll tell you about the homes. Are they making money?" He's like, "Oh. yeah.
Well,V the first ones making us $400 a month, this one's making us 4 or $500 a
month." They were making like 8 or $900 a month between the tomb unlike... "You guys
are financially better off and servicing all your debts and then having plenty of
leftovers, right?" "Well, yeah but we still have debt and that makes us
uncomfortable." I said, "Okay, well tell me about the values." And they'd bought both
of these homes for right around $100,000 we're now worth about 150. Their net
worth had gone up. You know, almost a hundred thousand dollars. They were still
worried. And so let me make sure I understand this. You're making 7,
8, 9 hundred dollars a month cash flow, you've got a hundred thousand
dollars in net worth increase on just two properties in the last few years. And
you're staying up late at night with stress and worry because of the debt?
Like, "Yeah." I said, "I'll make you a deal I'll take those two homes off your
credit. I'll pay the same thing you paid for them. We'll wipe the slate clean.
I'll take them." And also they got defensive and they said, "No way!" Now, I
never would have really done that. "What is it? Like, well we're making all this
money every month cash flow and our net worths got up." I'm like, "Guys, then you got
a pick. Which foot are you going to put your camp in?"
The one that says I can't stand making so much money or the one that says I
love making so much money. You can't be both. Which one are you? That's why we
need the mindset training because when real estate does something you don't
want or when you're managing a higher level of debt, I mean, understand I've
made millions of dollars from managing debt. I have no intention of ever paying
our houses off other than by selling them. We're not trying to put it on a
15-year mortgage. We're not trying to pay them down. We're trying to control them
and then eliminate them. That's how we make a lot of money. Come in with the
right system, get the line's share of games, have the highest predictable
upside of good profits and then they're those profits are going to diminish with
time. So, after the fifth, sixth, seventh year, it's time to sell them and roll
that into something bigger and more. And so we've got this thing really nailed
down. Now, you and I if we buy 20 homes, 50 homes, 100 homes. We're going to have some...
We're going to have a couple of war stories to tell. But I also believe that the
profits are going to far outweigh any of those worse stories. And you'll find that
I'm never going to get my panties in a knot, I'm never going to get negative or upset
over it. I'm going to acknowledge it, I'm going to treat it as fact and information
that it is. Make good wise decisions based on our experience. We're going to move
forward. I'd encourage you to learn how to do the same. When my money is on the
line, when your money is on the line, there's a learning curve and learning
how to do that. But you can learn how to do that when you're in a good
relationship with a team that has experience. And I don't know what more
you can really ask for. So, the good the bad the ugly is that 99% of the time
it's good. And once in a while, it's going to turn on you and look bad. But don't lose
sight. Have vision. If you could walk away from this video with one thing before we
continue your training. It's that you need to have the perspective of the
decade. Instead of the perspective of the moment. You see in the moment, fear will
set in and say, "This is going the wrong way." And in your mind, you can expand that
to be such a bad thing. But every bad scenario I have in real estate like thatm
you wait a couple more years and when you sell and you get all your profits,
guess what? In most situations you say, "That was totally worth it." Time solves
all in the game of real estate. Sometimes we have to wait longer than we wanted.
But that is the solution that will help bail us out. So we got our Sleep Well at Night
account, we got time on our side, we got cash flow in the meantime. And we've been
doing this with the strategy we've done on over
3,000 homes. And I'll tell you that instead of getting so upset and uptight
about the times that don't go well, they are short, they're brief, you learn how to
mentally manage it and then be okay with it. It's just having those hiccups and
having those problems are a part of making a lot of money in real estate. Hey,
thank you so much for watching today. In the next video, we're going to talk about
how much money our partnership can realistically make? Some of you want to
know, "When can I retire? How much money can I make?" And I'm going to give you a
little hint. In that next video, I'm going to give you a little strategy that's going to
open up the door to say that you can build as much wealth as fast as you want
with the strategies that I can teach and show you. So, it's super exciting times. If
you are thinking about partnering with me and you want to go through that
interview and criteria process, then go ahead and click the link in the
description below. Talk with my team. Generally, you need to have six figures
or more to be able to partner with me. I have some of my partners that have
millions of dollars and we're also building with them. On the other end of
the spectrum, if you're like, "Kris, I'm not in a great financial situation. I
appreciate this training but what can I do with it?" Go to kriskrohn.com. Spell my
name the right way. And if you go there, I want you to find partner profits. Partner
profits is an extensive course that gives you your LLC's and gives you the
business plan and will show you how to find people with the money and how you
can do deals with them. So, this video has something for everybody. And if you're
not already a subscriber, make sure you take care of that and otherwise I'll see
you on the next video in this series of how to successfully partner.