Rethink What's Possible: Why "Too Good to Be True" Might Just Mean You're Thinking Too Small
If I offered you a 12% annual return on your money with monthly cash flow, what would you say?
What about if I offered you a deal that gave you a significant write-off today and a 20-40% return for a few years in exchange for a decrease in future value?
Or if I had a deal where you could triple your investment in 8 years and forego cash flow in the interim?
One more...what if you could buy a tax credit worth 1.25x what you pay (i.e. you pay $10,000, get a tax refund of $12,500)?
If it sounds too good to be true, it probably is...right?
For a long time I believed this statement. But here's what I've really found...
The accuracy of this statement depends on the association you've normalized.
Here's what I mean.
If you're surrounded by people who...
struggle to put money away to invest
seem to be plagued by bad luck
are praying their financial advisor + 401k gets them to a healthy retirement
...then yes, these options sound definitely too good to be true.
However if you're surrounded by wealthy people who find creative and lucrative deals regularly, these examples are table stakes.
When you've normalized playing small, playing big feels too good to be true
Conversely, when you've caught a glimpse of the possibility of playing big, you're no longer willing to settle for playing small.
When I was full time in real estate I caught that glimpse. I'll give you 2 examples.
Deal 1:
In 2019 I bought the best deal I've ever done and did it with a partner. I brought $4k to the table, he invested $35k, I ran every aspect of the deal, and we split the deal 55/45. Here's a really simplistic version of what happened (if you want more detail hit reply and let me know. Happy to share more):
We created $100k in value in the deal and pulled a $70k line of credit on that equity
We used that equity to flip 2 houses, generating around $50k in total profit
We rolled those profits, plus some additional cash from me and from an additional partner (Partner 3), into a larger multifamily deal. A year later we sold it for a handsome profit (I can't remember exactly how much)
A few months later we sold the original deal and closed out the partnership altogether
I don't remember the exact numbers from all of the deals, and I'd have to go through way too many old docs to get it. But in rough numbers...for doing all of the work on 4 deals over the course of 3.5 years, I turned $4k into close to $200k and Partner 1 turned $35k into $185k (122% annualized return across 4 deals). Partner 2 turned $100k into $150k in 1 year (50% return on just 1 deal).
Oh, and none of that includes the cash flow or tax benefits we realized from owning real estate.
Deal 2:
Later in 2019 I bought another deal with a partner. Terms were different on this one but the deal was much simpler...we each brought around $15k to the table, split the deal 60/40, and sold it less than a year later for a $50k profit. I turned $15k into $45k, and my investor turned $15k into $35k (133% return in less than a year).
Resetting expectations
Are these the norm? Certainly not.
And I sincerely hope you don't take these examples to mean that there's no losing (just ask about the deal I lost $200k on if you don't remember the story).
But these are just two examples of many that I could give you.
I shared last week how VITALLY important I believe it is to take control of your finances. To know what's out there. To challenge norms. And to do better.
The scenarios I led this email with are very real opportunities that exist out there.
The deals I shared are very real deals that went down.
In the modern economy we live in, despite some crazy shit going on (maybe we'll talk more about that another time), there are SO MANY ways to create a return on your hard earned money.
There are SO MANY ways to set yourself up for a better life now, or a better future down the road.
You just have to be willing to rethink possibility.
Rethink fear.
Learn a bit.
Step outside your comfort zone.
And explore what's out there with an open mind.
As you can tell, I'm no financial advisor
Seriously, this is the part where I insert the financial disclaimers. This is in no way financial advice...aside from Airbone, Air Assault, Ranger, EIB, a Six-Sigma Green Belt, and a drivers license, I have no certifications or licenses.
So don't you dare take this as financial advice, go do something stupid, and blame me.
But PLEASE, for the love of God, take this as a push to think a little differently.
To use your brain.
To use your hard earned dollars more effectively.
And to rethink what's possible.
Money is important. So I hope you add a level of intentionality to your financial endeavors.
