Why Financial Planning for Real Estate Investors?
Starting a business is scary. I know. I never anticipated that I would be starting a business. I can’t think of anyone in my family that were entrepreneurs. I wasn’t one of “those kids” that always wanted to hustle, starting lemonade stands or lawn mowing businesses. If anything, I was a hard worker that appreciated someone else telling me what to do and getting a paycheck at the end of two weeks of work. The last 20 years of my life have been filled with great jobs that I have enjoyed learning from each and every one. However, during the last 13 years, I have been on a path seeking financial freedom and a primary component of that has been real estate. I realized there were many others on the same path as me, but didn't have the same background that I did. It was for them that I built RE|Focus.
I encourage every single person I speak to that is considering getting into real estate to think of it as a second job. However, this isn’t 100% accurate, because it really isn’t a second job. I tell them to think of it like this because it isn't like Apple stock, you can't buy it and forget about it. It might start as a side-hustle, but at the end of the day, it is an entrepreneurial venture. As a real estate investor, you are responsible for the product, you are responsible for repairing the houses, finding tenants, and addressing ongoing issues. However, at the end of the day, real estate is a great business, especially if you start young and slowly build. Just like a construction company, software company, or lawn company; building a real estate portfolio can be an efficient process or inefficient process. Developing and using systems to continue adding more “clients” will allow the business owner to scale themselves. If you own a lawn care business, there will come a day when the owner has to make a decision to continue mowing yards or continue growing the business. The same is true for a real estate investor. These are all important conversations that real estate business owners must consider very carefully.
Now, why create a financial planning company that specializes in working with real estate investors? As someone who worked for over 7 years for a large financial advisory company, I found that the primary focus of the business was increasing the amount of assets under management. While there is nothing wrong with this approach, especially as the clients have a desire to grow their investment portfolios. However, as I considered the idea of working with clients that own real estate as a core piece of their long-term asset allocation, I found that this approach would be in direct conflict with the real estate business owner growth plans. I wish I could say that I did an overwhelming amount of research, developing a comprehensive product market fit and knew exactly what real estate business owners wanted from a financial planner. However, in observing conversations on BiggerPockets, real estate investment Facebook groups and anecdotal evidence, I was convinced there was an underserved market of real estate business owners. The services of RE|Focus are simple, there is a one-time project based engagement, as well as an ongoing engagement, both well suited for real estate investors.
As I said, starting a business is scary. However, what I didn’t realize is that 13 years ago was when I started my first business. When I bought that first rental property, I began my entrepreneurial journey. Over the years, this business has grown, organically and slowly. Now as RE|Focus Financial Planning is being launched, my goal is for this business to be a blank canvas to reimagine what financial planning looks like, especially for real estate investors. Whether you are slowly building up a portfolio of single family homes, have a goal of buying your first small apartment complex, or you are an AirBnb rental investor; I am here to be a guide helping you understand your goals and the plan to achieve them. With any new business, it is good to map out core values and objectives of the business. I will likely expand on these in a future post, however, these are the principles that RE|Focus Financial Planning was founded upon.
Integrity - This is something that is many times missing in the financial advice industry. There are far too many articles every month about fraud being committed by financial professionals. Fraud is a well-publicized issue in our industry, however, having integrity is a much deeper issue because there are “legal” ways to provide financial advice, however, they would not pass ethical muster in my opinion. Integrity is an internalization of always putting others before yourself. There is a reason this is our first core principle.
Transparency - It is incredibly important to us that anyone can take a look at the RE|Focus website and immediately know what it would cost for them to receive services from us. If you would like a review of your current costs, we are happy to provide this so you can compare our fees and services to other providers.
Quality - Unfortunately, the quality of financial advice is very inconsistent from advisor to advisor in our industry. With many years of experience in tax planning, cash flow planning, investment planning, and estate planning, we are extremely competent in all of these areas. However, we do not hesitate that when there is a gap in our knowledge to bring in 3rd party professionals to weigh in with their specific expertise. This ensures the advice from RE|Focus is always extremely high quality.
Trust - We want to be the trusted resource for our clients. If there is a question even remotely related to finances, we want our clients to know that we fully expect to be the first place they go. Trust takes time to build, however, with Integrity, Transparency and Quality being delivered, we hope trust will also follow.
