We see all the time that an entrepreneur doesn’t want a boss or a job. Instead, on their way to building their business, they end up becoming their own boss and their own job because they’re working so hard that they can’t stop and step away. They put the handcuffs on themselves, and they don’t even realize it.
As a lifestyle investor, Justin Donald is focused primarily on income properties and mobile home parks for his investment portfolio. Because he thinks of himself as a lifestyle investor, Justin builds his business around his life. He doesn’t have to work; he gets to work. The difference in how he thinks about his work fills him with creative business ideas.
The number one rule that Justin has is that you should invest in a cash flowing property. Don’t invest in an asset because you think it will appreciate. It should be cash flowing from day one, or it’s not a deal. Some people have a process where they don’t rely on cash flow from day one, but for Justin, he needs that peace of mind. Because when he purchases for cash flow, every other improvement he does from the day of purchase is just gravy.
If you’re looking for the best return and you’re willing to put in some work, Justin highly recommends an owner operator active style of investing. You’ll need to gather a team around yourself, and you’ll need to pay good
Scale Up with Protocols and Systems
What you can measure, you can improve. Therefore, you need to have stats on everything. You can’t replicate success unless you know what contributed to success in the first place. That’s why Justin likes to look at the rent roll every month. He wants to know what turnover looks like and what kind of vacancies they’re experiencing so that he can watch for trends.
Keeping an eye on the profit and loss sheet also means he knows when he’s trending in the right direction, or if month over month they’re losing money. Losing your tenant base or finding that people aren’t paying shouldn’t be a surprise three months into it. Digging into the numbers means that you’re not relying on emotions to drive your decision because the math speaks for itself.
With evictions, when you rely on emotions, it’s easy to become caught up in a sob story. Justin already has a strict no-pay no-stay policy with procedures alright put in place. The protocol is a five day grace period, and then a letter stating that the tenant is late. Then he turns it over to his eviction attorney. There’s a framework, a system, and a protocol around everything he does, and it reduces the amount of decisions he has to make every time a tenant’s late on the rent.
So many of us fall for that sob story. I’ve had listeners tell me that they waited months and months to finally evict a non-paying tenant, when they should’ve done it by the fifth day. Whatever your policy is, when you decide to be lenient and let your emotion overcome your process, then you’ve just broken your business and your scale.
Take Care of Your Employees and Tenants
Removing emotion from the eviction decision is just one of the ways that you can scale up your business and roll your success into your next property. But it also has an interesting side effect. When you have a SOP based around math and not emotion, then you can add emotion back into decisions that will truly affect your organization.
Recently Justin noticed that one of his mobile home park managers had carpeting that just didn’t look nice, so he decided to replace everything in her unit. This was a woman who ran a food pantry and spent a lot of time helping other people, so Justin was happy to upgrade her unit. Of course, she was delighted that he thought of her and now his business has a fan for life. When he removes the emotion from difficult business decisions, he can add emotion back into real relationships.
Lifestyle Investors Are All About Milestones
Your net worth is in your network, and Justin has been around a tremendous amount of entrepreneurs. He understands what makes a great entrepreneur because he’s seen such a huge variety across many niches. Besides setting up a system, truly successful entrepreneurs are focused on the milestones and not the goal.
With an insatiable desire to learn, great business owners are always in the dirt. You know, they’re not focused on sipping mai tais on a beach because they want to learn how to accomplish things. If you’re one of those entrepreneurs who thinks you’re going to wholesale a bunch of properties or buy a multi-family, but then you’re just going to sit on your butt all day, I’d encourage you to rethink that.
Guys that I know like Justin have that insatiable itch to learn because they get bored if they take some time off. If you think about someone like Richard Branson who is an older gentleman, he hasn’t lost any of his insatiable appetite for learning or growth. A lot of the businessmen I meet in the back rooms are also really accomplished and they’re not taking a step back from their business any day soon.
Each success builds on the next success because they’re not aiming for an ultimate goal. They’re trying to hit growth milestones in their life.
Active investing is definitely a little more work than passive investing, but it also has great benefits. When you wake up every day doing something that you love, then your work fits into your lifestyle and leaves you room to enjoy your family on your terms.