Once upon a time there were two friends, Bob and John, who were partners in business together...
Bob and John had been working together for quite a long time and felt as though they were doing pretty well for themselves. Their company always seemed like it was on the verge of taking off. They leased a building, had a number of good customers, five employees, two company vehicles and very big dreams. Though they worked extremely hard with very little time off, in their minds they were in the process of creating something very real and substantial. It seemed that they were going to get "there" one day and when they did the remainder of their lives would become easier. Their determination and perseverance would pay off and they then wouldn't have to work so hard.
Things continued in virtually this same way for many years but along the way, Bob and John began to notice, at various places and times, what they began referring to as "certain kinds of people." Some of these "certain kinds of people" that they'd encounter were customers of theirs. They'd met a couple of them at one of their kid's birthday parties. Others they'd meet at dinners with friends. They even met one in a jacuzzi at a resort hotel. And while these "certain kinds of people" wandered into their lives randomly, an easy to notice pattern was always evident.
Upon examination, and almost strangely, these "certain kinds of people" always had three very same things in common:
- A lot of time on their hands
- An awful lot of money
- A lot of property
And, being similar to each other as they were, these "certain kinds of people" also always seemed to repeat (often) these identical words to Bob and John. Like members of some exclusive club might chant, they'd say:
"Boys, go out and buy some property! Please just one. Just buy ONE for Gawd's sake."
So, after many years of hearing this same advice many times over, the boys finally called a real estate agent and said the six magic words:
"We want to buy a property."
The real estate agent, being accommodating as agents tend to be, arranged for a viewing of a property he'd known about for a long time which he wasn't able to sell; perhaps partly because it was painted a very bright yellow, much like a lemon.
The big yellow lemon with windows, doors, walls and a roof had been foreclosed upon, was now owned by a bank, unlived in and pretty much a wreck. It was the house that was in the worst condition in an otherwise good neighborhood. You know the one...
Unfazed, the boys were determined and decided to act on the advice they'd been receiving for so long. They bought the yellow eyesore. The agent couldn't believe his good fortune that the boys magically appeared into his life. And as it turned out, Bob and John got a great deal too because they did some very smart things.
The boys fixed up the big yellow lemon. They not only painted it, they also made a number of other renovations, repaired the flooring, installed some new appliances and added landscaping. The house is still yellow but it's not a lemon any longer. They gave it new life and brought it back to what it was born to do: be a home for people. They then found some nice, reliable tenants and rented their (now) masterpiece.
About two years after they'd purchased and renovated the home, our boys realized that between the built in (and growing) equity, tenant rents and appreciation of the value of the home itself equaled about half of the annual profit their entire business generated.
Even with a company, customers, employees, vans, other equipment, (too) many late nights and weekends working and other heroic feats of work, how could one yellow lemon produce such income by itself; without much effort, in just a couple of years?
"Hmmmmm, this property investing might be 'A good thing' after all."
So John, always handy with the calculator, comprehended that if you buy income properties at more than 20% under the perceived market value, perform the appropriate repairs, renovations and some cosmetic touching up you could then assume the equity (which expands over time) and perpetually collect rents... And you could multiply this just by repeating the same model.
So John was assigned to purchase more properties and Bob was given the rewarding job of finding a buyer for their company, the vans and the other equipment. This also meant that the incredible hours, worries and other headaches they'd been enduring would be moving on too.
Two new and very different (better) type lives were now formed. With additional experience, the boys caught on even more as they learned. They merely began replicating the same process again and again and again, until, after just ten years they owned properties worth millions of dollars that were producing never ending streams of income. They'd discovered and transitioned to a very different and new dream for themselves.
And that's how Bob and John became "certain kinds of people" too...