The first law of motion

If you watch TV at all you have inevitably watched the commercial for Celebrex which is an arthritis drug. The commercial states that “a body in motion stays in motion and a body at rest stays at rest”.

This commercial is based on the first law of motion that Issac Newton published in 1687.  Which states that an object either remains at rest or continues to move at a constant velocity, unless it is acted upon by an external force.

This week I was having a conversation with a good friend of mine about this very concept. Not Issac Newton, we aren’t that smart.

We were talking about running. I was explaining to him that as a runner, it is very easy for me to go out and fall into a pace that my body is very comfortable with.  It could be an eight minute mile or a seven minute mile.  It just depends on your conditioning.  Whatever that pace is, it is easy to stay at it because your body can do it without efforting.

I am sure there are more scientific ways to explain it, but I am not scientific.

To increase your speed and accomplish running goals you have set for yourself, you must break the inertia, the temptation to stay at the comfortable pace.

It is hard to do, that inertia is so cozy, easy, and feels great that your mind wants to stay right there.  You may call it your comfort zone. But as long as you do this you will never increase your speed or times towards any distance goals you might want to accomplish.

I was a runner for close to six years before I learned how to really train.  For those first six years I definitely became a better runner, with better speeds and times, but it wasn’t until I started training my body to become very uncomfortable that I made significant gains.  By gains, I mean faster miles, longer distances, and winning races I competed in.

In running that training starts with forcing yourself out of that comfort zone for small periods of time over and over and over, until it stops being that uncomfortable to you. As you continue to do this repeatedly you eventually become better conditioned and you start moving the needle towards whatever goals you might have.

At almost 42 years of age, I am probably twice as fast I was when I was 32.  Its isn’t that that I am getting better with age.  That theory doesn’t hold up in athletics and age. Instead it is I am a more educated and I am better at training.

If I would have known how to train at age 32, who knows what I could have accomplished as a runner.

Whether it is running, biking, writing, speaking, investing, you name it.  For you to break any slump or cycle, you must break the inertia.  You must apply force someway and somehow to move yourself out of the comfort zone.

I am a real estate investor. I have purchased many single family homes. When I first started doing it, I was always a little scared.  I would just think things like this.  “Is this a really good deal”, “Will I be able to fund a tenant”, “What if something goes wrong”, “What if someone destroys my property”.  All of these question ran through my head.

Many years later, I never even think about those things. Purchasing single family homes is easy for me.  I never over think it.  However, it is too easy and too comfortable for me, that I can easily fall into the trap of continuing to only purchase single family homes.

For me to scale my real estate portfolio the way I want to, it is going to require me to buy bigger deals.  Multi-Unit/apartment buildings is now the direction I want to go and I must go.

Many of the same concerns and questions I had early in my investing career are popping up in my head. “Will I be able to find tenants for all of the units”, “What if all of my tenants move out at the same time”, “What if all of my hvac systems go out”.

As these questions pop up in my head it is easy for me to want to stick with the single family homes that I am comfortable with. But I am pushing through because I know I must get to the next level and the only way to do this is to go in the new direction.

I share these stories with the intent to inspire you to force yourself out of the comfort zone you find yourself in. Inertia is a bitch.  Without additional force and pressure from yourself or others you will never get out of the rut or zone you are in.

To your success and your future.

Three things I did to pay off my third rental property

As of this writing I have written well over a thousand articles on a wide range of topics.  A topic that I haven’t written about is real estate.  And it is probably one of my favorite topics on the planet.

I bought my first rental property in 2006 at the age of 26.  It was a duplex that I owned up until I moved to Florida in 2015.

My attraction to real estate started when I was young and it is something I have loved ever since.

As of this writing I own five single family residences.  Four of the five are paid off. Two of the five are condos that I paid cash for when I bought them, so I never had mortgages on them.

Over the years I have listened to many so called experts.  I say so called experts, because I am sure they are all successful in whatever they have done and accumulated.  However, they all had different processes they used to get there.

Some of them used a lot of debt to have success, some used minimal debt, and some used no debt to accumulate the wealth and experiences they have in the area of real estate.

I have always been a fence rider on the topic of debt when it comes to real estate.  I innately hate debt. When I became debt free other than the mortgages I had on rental properties and the house I lived in.  I said I would never have debt again.  And I haven’t.

The topic of debt in real estate is something I go back and forth on though.  I am not sure I have a clear opinion one way or the other on it as of today. However, I did make a commitment to myself that I would pay off the other three houses that I did have mortgages on though.

This morning I looked in my journal to see when I made the goal to get the third rental property paid off. The first date I wrote in this journal is 10/19/2018.  Today is 7/1/20.  I assume it may have been in there before.  However, lets just assume that was the first date I wrote that goal down.

On 1/31/2020 we paid off the third mortgage. Since then we have paid off a fourth and could pay off the fifth, but I am having that whole internal discussion on whether to pay it off or use the money we have saved to buy more.  This is another topic for another day.

How did we pay off that third mortgage?  What did we do?

  1. I wrote the goal down everyday:  As I mentioned, I can look in my journal and tell you when I started writing that goal down.  I wrote it down for close to two years almost everyday, until I accomplished the goal. This one thing is first for a reason.  To achieve what it is you want to achieve you have to remind yourself daily that this is what you want to achieve.
  2. Everything extra went towards it. As I mentioned I struggle in the area of whether to have debt or leverage debt when it comes to real estate.  There is one person who is clear on this topic though.  That is Dave Ramsey.    He is a firm believer in no debt on anything.  He has a proven method for people to get out of debt and has helped millions of people do it. One of the things he talks about is the snowball effect.

    The snowball effect is if you take a ball of snow and you roll it down ahill.  As it makes it way down the hill it gets bigger and bigger as it accumulates more snow around it.

    Also, the momentum of the snowball picks up as it makes it way down the hill.  He uses this method when it comes to paying off debt.  Which is to take all extra money and apply it to your smallest debt and pay it off first. He believes, and he is right, that the momentum that a person creates when they are able to pay off something quickly provides them the momentum they need to keep them going to pay off other debts.

    I used this method for paying off this mortgage.  I took all extra money we made and applied it to this mortgage.  It allowed us to pay it off in seven years from the time we took the loan out.

  3. Stay committed no matter what: From the time I made this commitment until we accomplished it, a lot had changed.  I started two different companies, we moved twice, and my income was wildly unpredictable.  During these kind of times most people throw their goals out the door and say they will come back to them when things are more secure. I did not.  I stayed committed.  I kept committing to that goal everyday.

I am a novice when it comes to real estate investing  However, it is something I am committed to and will continue to get better at.  My hope is you find this information to be helpful in your journey.

To your success and your future.