Journey to Real Estate Success

One Real Estate Investor Family and their Journey to Success

By Dan Krupa

"It was the best of times, it was the worst of times...it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us.... – in short," it was time to leave our W2 jobs and focus solely on real estate investing. Time to invest in Real Estate (RE) and shameless rip off a classic novel to entice people to read an article.

This is a story of an Army officer Dan and his wife, Michelle, who decide to ditch the rat race, leave behind their advanced degrees, and focus on real estate investing full time.

I am Dan Krupa, a real estate investor and owner of Reveille Homes. Like many others I found my way into real estate accidentally. I was told: “Go West young man, Go West...and buy a house when you get there. Plus find a safe, good-paying job.” (I might have made some of that up)And that is exactly what I did.

My journey was normal in many aspects to most Americans. I went to college, overpaid for information that had almost zero practical use in my life, joined the Army, and bought my first property in Tacoma, WA December of 2005. (best time ever to buy a house! Please note the heavy sarcasm)

Over the course of my 12 years in the Army I met and married my beautiful wife and we acquired three properties. We had: house hacked, bought-rehabbed-rentedrefinanced (BRRRed), completed an advanced flip in two weeks and sold that property for 10k over asking price, been long distance landlords, got ripped off by property managers, and discovered that real estate is our passion. We’ve done quite a bit more since then.

After 12 years in the Army, 24 months in Iraq, an operational deployment to West Africa, and missing out on the first six months of my son’s life I decided it was time to stop working for “the man.”

The purpose of this article is to share with you the lessons my wife and I have learned over the years, help fellow investors overcome the obstacles they face when starting out in RE investing, motivate others to take action, and create better homes in our communities. Ok, enough with backstory, let’s get to the real estate stuff.

Below are five actions that will help you grow your investment portfolio faster than Michelle and I did

One: Get Educated, Stupid.

Have you heard the story of the Charles Steinmetz and Henry Ford? Ford engineers were trying to fix a gigantic generator. After exhausting all options the Ford engineers called in Charles Steinmetz from General Electric (GE). “Upon arriving, Steinmetz rejected all assistance and asked only for a notebook, pencil, and cot. Steinmetz listened to the generator and scribbled computations on the notepad for two straight days and nights.” During the second night Steinmetz climbed onto the generator and made a chalk mark on a panel. The Ford engineers were instructed to remove the panel and replace sixteen windings from the field coil. The Ford engineers were skeptical but completed the task. After the repairs were completed the generator performed to perfection.

Henry Ford was thrilled until he got an invoice from GE in the amount of $10,000. “Ford acknowledged Steinmetz’s success but balked at the figure. He asked for an itemized bill.

Steinmetz responded personally to Ford’s request with the following:

Making chalk mark on generator $1.Knowing where to make mark $9,999.

Ford paid the bill." (http://www.smithsonianmag.com/ history/charles-proteus-steinmetz-the-wizard-ofschenectady-51912022/#iJ2uKwS8ZHHk8uhv.99)

The moral of the story is not that you should go it alone, but that knowledge is power. You don't have to be, and shouldn't be, an expert to begin investing in real estate but one should do preliminary research. Have a general idea of what type of investing that want to focus on. Then do everything in their power to research and learn about that niche.

Read books. Listen to podcasts. Watch webinars. Read the forums. Attend local REIA meetings. Find a mentor who specializes in the RE niche you want to participate in. Do everything in your power to get smarter. No one ever died saying “I wish I had spent more time working.” or “I wish I hadn’t become so educated.” (Education does not equal formal education)

Two: Stop Wasting Your Time.

Everyone has 24 hours in a day, and only 24 hours. That is a fact my friend. So why do some people get so much done and others don’t? Productive people don’t waste the majority of their time on social media, watching television, or other pursuits that are purely leisure.

The average American watches more than FIVE HOURS of TV a day. Let me repeat that, FIVE HOURS! Yet, some people can’t “find the time” to work out or learn about RE investing. If you are focused enough to avoid the time wasters and devote the majority of your free time on RE investing, in six to twelve months you will be light years ahead of the average American.

Three: Write Out Your Goals Every Day!

No, that wasn’t a misprint. I want you to sit down and write out your goals every day. Goals focus us. They give us a sense of purpose and when used properly force us to action.

My goals are reviewed twice daily, written out at least once a day, and are always drafted in a manner in which I have already accomplished. Example - “I spent my fortieth birthday in Australia with my family.”

Personally, I break goals down into four categories: six months, 1-2 years, and 3-5 years, and someday. Your someday goals are akin to your bucket list.

Your goals should build on each other. Your six-month goals should help you accomplish your 1-2 year goals, 1-2 year goals help accomplish your 3-5 year goals, and so on. Always start with the end in mind, though. Where do you want to be? Then work backward. Create a roadmap in your mind of how you are going to get there and then write it out.

Your goals should act as landmarks on the roadmap you created.

Finally - REACH! Don’t settle. Our society tells us not to strive greatly. That is is better to gain a little then come up short. That, my friend, is a lie. Make your goals big and scary. They should shock you into action. They should seem far out of your reach. Big, scary goals are the kind of goals worth getting up early in the morning for, staying up late at night for, and forgoing watching The Walking Dead for.

Four: Don’t Be Scared of Your Own Shadow.

The unknown is always scary. That includes real estate investing at first. After the collapse of the housing market in 2008/09 we were all told to never trust real estate again…

How did that work out for the naysayers?

Don’t believe the lies, the fear, or the self-doubts you might have. We all have it. Someone telling you not to invest in RE because it is risky, shouldn’t be allowed near you.

Crush that inner voice that tells you that you will fail or lose your money. (You might lose your money by the way. But at least that is an education worth paying for and you can use in the future)

Nothing is gained without venturing out and trying new things. I wish I could tell you that everything will be okay, you can invest and be safe. But we all know that is a lie. All investing has risks. Just as life inherently is risky and dangerous.

So, break free of the doubt and fear. Surround yourself with people who are successfully investing. Ensure your friends and partner/s will cheer you on, not hold you back. Get educated, ask lots of questions, and learn from other’s mistakes.

Whenever I worry about failing, I think of the Man in the Arena quote by President Theodore Roosevelt:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Five: Take Risks, Not Gambles.

We have a saying in the Army when it comes to combat. “It is always ok to take risks in combat but NEVER gamble with your soldier's lives.”

What is the difference you ask between a risk and a gamble?

Simply this. A risk is a: calculated yet dangerous action. You weigh the pros and cons. Understand the possible outcomes of your situation and know what and why you are taking the risk. Then act and act boldly. Sure, you could still fail but you won’t fail due to a lack of knowledge or understanding of your situation.

A gamble, by definition, is when you take a risky action in the hope of a desired outcome. Hope is not a strategy. When you gamble you aren’t sure of all the perils you face. You don’t fully understand the situation or potential pitfalls. Yet, you acted and acted aggressively anyways. That is also called acting foolishly and we all know what they say about a fool and their money.

Take risks when it comes to RE investing but never gamble. (Please note - I am not saying to not take chances or not be bold. I am a firm believer that life favors the bold. However, it also punishes the ignorant/stupid.)

Now get out there, take some action, and change your lot in life. Join me at the September MAREI meeting to talk rehabbing and flipping houses.

Dan & Michelle Krupa