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Real Estate Investing, Coaching & Education

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15 Feb

Struggles, Crossroads and Paving a New Beginning

Struggles, Crossroads and Paving a New Beginning

It’s been awhile since I wrote a blog and as one of the busiest weeks of my life started to whine down I thought the time was right. Writing Blogs for me is one of the hardest things I do in my line of work.

It takes me out of my comfort zone but on a good note it does force me to shut out all the noise and concentrate on one thing.

As I was soul searching… I honestly came up blank. The next best thing I could come up with was to go through some of the emails I had written to my clients in the past.

As I was searching through my outbox I came across a note.

I’m not going to mention who I wrote this to but if the individual reads this Blog remembers it, I hope it re-sparks their inner light. For anyone else, I truly hope it helps if you are at a crossroad in your life.

Some of you may agree with what I have to say in this Blog, but I’m also sure some of you won’t and that’s fine as well.

What I’m going to share are topics I’ve never shared before publicly and felt it was time to put myself in a vulnerable position.

Here we go!

One of the things when working with a financial advisor or someone who is going to help you with your budget is this… they are usually in the same situation as you, slightly better and sometimes even slightly worse. I’m not against them, but they are most likely going to take you down the same track you’ve been down already and I’m sure you already know how to budget.

Now going on a budget is a great idea, Darlene and I are strict on this as well. Here’s the issue with only working within a budget; it slowly gets you out of the rabbit hole until something unexpected arises and you’re back to square one or worse.

A budget is half of the game plan. The other half is way more important.

Here’s the other thing that will always happen to you. You’ll get some extra cash and all of a sudden the car breaks down, the money is gone and there goes your budget. The reason why is this;


This is the other half. You haven’t told your money or the universe where you want it to go. Every 6 months, Darlene and I place our order to the universe by writing down what we want and the month we want it.

80-90-% of the time we get what we ask for or at least VERY close to it. From the cars we drive, the vacations we will take to how many homes we will acquire every year. Today our goals aren’t as materialistic as they were 3-4 years ago but I want you to understand how it works.

With the board, it will start to move your money to what you’ve asked for and if you don’t have enough, new money will start to flow to you. Money isn’t evil like people say it is… it’s the love of money that make people do evil things. Money is a tool, not something to be held on to or kept. Think of money as water… it’s essential but not required all the time.

Back to financials.

Things turned around for me when I started to take advice from someone who was where I wanted to be mentally and financially. It’s as simple as that. Now money isn’t the ONLY thing important in life but I rank it as high as oxygen.

The best thing I ever did financially was to get myself into more debt!

I know it sounds crazy but that’s what I was told to do by one of my early mentors. He was in a better position than me financially.

I went to all the banks, got as many lines of credit as I could and the largest home equity line of credit possible and used it to my advantage.

Darlene of course almost went into cardiac arrest!!

Every single investment property I have purchased to date has been with my lines of credit, the equity in my home or with other people’s money.

I have not used 1 single penny from the income I have earned. The money I receive from Real Estate is from my JOB and a job stands for Just Over Broke. If I strictly relied on this, I would still have a 9-5 job.

Today I am THOUSANDS of dollars in debt but it’s good debt. I have no bad debt today, or very little.

Here’s what they don’t teach you in school and I really don’t know why. There’s a HUGE difference between good debt and bad debt. Most people who are successful have massive amounts of good debt and very little in bad debt.

Here’s the difference

Bad debt – car, consumer debt and your home

Good Debt – mortgages, lines of credits secured to investment properties

The reason they call it Real Estate is because it’s REAL. It’s tangible, you can touch it feel it and once the home is built it doesn’t go away. Also, if it burns down (and you have the proper insurance), they will rebuild it for you. How crazy is that! If your stocks burns down, it’s gone forever.

Is your home a liability? Yes, but most people don’t realize this. Look at it from this angle.

If you lost your job tomorrow, how long would it take before the bank repossessed your home?

Here’s the name of the game… CASH FLOW! The more passive income and cash flow you have coming in each and every month, the more your life changes.

If I didn’t sell another home or Darlene didn’t write another mortgage this entire year would they take our investment property away from us?

The answer is No!

There are tenants living there, paying each month and they need somewhere to live during good times or bad. The vacancy rate where we currently invest is under 1.5% which means there’s a housing shortage and people need somewhere to live.
Now why do I call a J.O.B. –  JUST OVER BROKE?

When you have a job, especially a 9-5 job, your yearly increase is between 1-2%. Inflation on average is between 3-5% (it’s actually higher, go to the grocery store and see if I’m lying).

If your yearly increase is less than inflation, it’s a system that you can’t beat. That’s why the saying goes “the rich get richer and the poor get poorer”.

So you might ask… what if the market turns and your property goes down in value? That doesn’t concern investors who understand the market. Rent rarely goes down, it usually goes up and is tied to inflation.

If you have cash flow each month, you can always put food on the table. Appreciation on the other hand is only icing on the cake. It’s sweet but doesn’t fill you up and it’s not required to keep you alive.

I’m not against have a job, some people love what they do and that’s great. You just need something else in your portfolio that’s going to outpace inflation.

Here’s the key to success.

Use the bank’s money or OPM (other people’s money) and buy real estate or an investment that will outpace inflation. Each of my investment properties yield me between 25 – 35% ROI (return on investment) each year.

The sweat equity to keep these homes going is between 10-20 hours per year for each property. That’s it.

Now if I borrow money from the bank in today’s market, they charge me between 3-4% interest on the money they lend me. One of the tax strategies real estate investors have, is writing that interest off at the end of the year.

All I’ve done is learned how the system works. No different from a nutritionist learning how nutrition works to nourish the body!

But Gary, I don’t have enough money to start?

If you’ve heard the story of how I started, I only had $1500 in the beginning. I was broke, desperate and saw no way out of the rat race. Here’s what I discovered in 2008:

Purpose is stronger than object.

Remember this quote because it’s important. Write it on your bathroom mirror, write it on your palm just don’t forget this quote.

What that means is this;

For every home I’ve acquired, I’ve tied a purpose to it. The first home I bought was for my son’s education. The 2nd home was for my daughter’s education. See, when a strong purpose is tied to an object it’s impossible to stop you if you truly believe in your purpose for acquiring what you want.

I got turned down by 5 banks before I got my loan of $20,000 that allowed me to buy my next property with a joint venture partner.

Now if Real Estate isn’t for you, that’s fine. The key is to fine something that will produce income for you weekly, monthly and yearly while you sleep, play and enjoy life.

To set this up takes time, hard work, dedication and discipline.

For example, for the past 6 years, my newsletters come out every Thursday between 2pm – 4pm no matter what (excluding holidays).

I love what I do and I’m passionate about helping others but there are things within my business that I don’t always like to do.

People see me now and say ‘you’re lucky’ but they weren’t there with me at 4am in the morning while I was writing my blog, working on my newsletter, editing my podcasts and had to get up at 5:30am to go to my job.

At least one or twice a week I’m still up until 2-3am working. Call me crazy, but while I’m here I’m going to do everything I can to make the best of this life (there’s lots of time to sleep in the next realm).

Here’s another secret, “Regret weighs tons and discipline weighs ounces.”

Another important thing to keep in mind is plan your day before you start your day. I never start my day until I have it complete. Now from time to time there are bumps along the road but at the end of the day before I close my eyes, 90% of the time I can say,

“That’s pretty much how I expected my day to go”.

From buying an investment property, to acquiring funds, taking vacations and spending time with the people that matter the most to me.

8 years ago I honestly could say I never knew you could design your own life.

The #1 question I get asked every day is this;

“How were you able to go from where you were to where you are today?”

My answer is simple… I changed my philosophy.

Before I hated paying taxes. Today, I love it because I understand paying taxes means my money is working for me.

What happens, happens to us all, what’s important is what you do about it.

Don’t wish it were easier, wish you were better.

The first step is the hardest. Would you ever give up on your child and say… that’s enough, you’re not cut out for this walking stuff?

Of course not.

I now know I would rather slide into my grave beaten and bruised up and say “wow, what a hell of a ride”.

Keep in touch and don’t be scared to ask for my help.

Gary Hibbert

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Smart Home Choice Inc.

P.O. Box 51109
Ajax, Ontario
L1T 4S0 Canada

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