Subscribe
Share
Share
Embed
Life by Design is a podcast that shares the experiences and tools you need to start living the life you desire, free from indecision, anxiety, and compromise.
Jessilyn Persson: [00:00:09] Welcome to the Life by Design podcast with your hosts, Jessilyn and Brian Persson. We support couples in achieving their wealth goals by sharing our journey of overcoming barriers to build our financial empire.
Brian Persson: [00:00:20] With our extensive personal experience and increasing demand from couples seeking alignment to invest confidently in real estate, we created the Riches, Relationships and Real Estate program to help you achieve your goals.
Jessilyn Persson: [00:00:34] Today, we're going to talk about how to start the real estate investing conversation with your partner. One of the main reasons to do this, obviously, is so you are on the same page as your partner, and you can understand what each other is thinking and feeling.
Brian Persson: [00:00:49] Exactly. There was a point in our past where we were very much not on the same page and very much not having the conversation. So we've learned through our own bruises and problems inside of our relationship to have this conversation. And we want to share it with you to make sure that you guys can have the conversation earlier than later and get moving fast on your wealth.
Jessilyn Persson: [00:01:15] Yeah. And so today's three takeaways really follow strongly along the framework that we talk about in many of our different episodes, the Discover Define Design framework, but our takeaway, first one today, is to discuss the resistance and fears that you or your partner may have around real estate.
Brian Persson: [00:01:36] And takeaway number one is all about the discover part of our Discover Define Design framework, where you go into your emotions, you explore what's really under the surface and you maybe you don't want to face it. Maybe you don't want to admit it. But that's what this is about, is about trying to figure out what is in your way and what emotions and barriers are coming up when it comes to real estate investing.
Jessilyn Persson: [00:02:04] Yeah. And so some of the questions we offer here are like what feelings come up around real estate for you, whether they're positive or negative, you want to talk about them both so you both have the same understanding going into real estate investing. And I know, you know, we look back in our past when we did real estate, I know it was super exciting for me and very positive. And I just loved so much about it. And I don't think it was that you didn't love some of it, I think it was just your fears were around some of the things about real estate. Like how much did you actually know about real estate investing right?
Brian Persson: [00:02:46] Back then, like so many people out there, they don't want to move unless you know everything. It's almost like you have to have the plan, not the plan, but you almost have to have a crystal ball into the future and see your future and know that everything is going to work out. Otherwise you just won't move. That's where I was. I wanted that crystal ball. I wanted to know that everything was going to be perfect. And I, probably those fears came out of that not knowing that everything was going to be perfect.
Jessilyn Persson: [00:03:16] Well, I think you also had a fear of not knowing what you were doing, which is very typical when you start anything.
Brian Persson: [00:03:22] 100% yeah. But I mean, you think about a kid walking, they don't know how to walk, but they get up, they fall down, they bump and bruise themselves. And do they say, you know what, screw this, I'm not walking anymore. They don't do that. They get up and they get up and they get up until one day they're walking around and that's real estate investing and that's a lot of aspects of life. Unfortunately, and I can say this because I, you know, I was stuck in that place, people don't like to do that. They don't like to get up and fall down. They like to know that they're going to get up. And they know that they're going to walk on the first time. And unfortunately, a lot of things just don't work that way. You got to take a little bit of risk and you got to jump.
Jessilyn Persson: [00:04:10] You got to yeah, make mistakes. And I mean, that's how you learn, right, from the mistakes. So I know another thing that we had to explore was the resistance of too much work or the overwhelm, even the thought of it, even if you're not into it yet, the thought of it sometimes just puts people standing still and not moving forward because they're worried about how much work it's going to be, how overwhelmed they're going to be. And this is worry that they don't even know yet because they haven't experienced it, might not be as bad as they think.
Brian Persson: [00:04:42] Yeah, anxiety is, as I say, is a problem that is in the future, hasn't happened yet. So you're experiencing an emotion today for something that doesn't even exist. It's still in your future. And a lot of people get into that space where they just don't want to start anything because they are worried, or they have anxiety about how much work it's going to take, what efforts and problems they're going to experience when they get into real estate. But one of the things, and you said it already, the positive and negative aspect on real estate, you got to, you have to explore those emotions. Because for me dealing with tenants is super, super easy.
Jessilyn Persson: [00:05:19] Now.
Brian Persson: [00:05:19] Now. Yeah, but even back then because you know, there's some logistics in real estate that you gotta figure out. But dealing with just people and their concerns has never really been a huge deal for me. And it's just navigating the personality with the laws. Sometimes that's a little bit tricky. But the point is that some people don't, we know real estate investors that don't even want to deal with the people, like they would rather not ever see or experience their tenants. And that's fine too. But you know, what's a positive, easy thing for me in real estate investing is a negative hard thing for someone else in real estate investing. Yet both people, myself and these other real estate investors we're talking about, are successful real estate investors. So part of the conversation that you have to have as a couple is what does that actually look like? What, where are you really going to experience positive and negative emotions, and are they going to affect your real estate investment career, like your journey, and how are you going to manage those?
Jessilyn Persson: [00:06:33] Yeah, that's the great thing about real estate is that there's so many different avenues and ways to do it and explore it, and you don't have to do it all. So like when you do go looking and there's something you're worried about because you just don't want to do it, you don't have to. I mean, and if your partner doesn't want to do that aspect, that's okay as well. There's always outsourcing or contractors that can help fill the gaps that maybe you and your partner don't want to do.
Brian Persson: [00:06:56] Yeah, yeah. But imagine if we had not had those conversations.
Jessilyn Persson: [00:07:00] Yeah.
Brian Persson: [00:07:01] And then all of a sudden we got into real estate investing and pretend like I didn't like to deal with tenants, and then you had to deal with tenants.
Jessilyn Persson: [00:07:10] Yeah.
Brian Persson: [00:07:10] It would, our real estate investing career would be totally different because you don't want to, you do not want to deal with tenants. That job falls on my shoulders. And so--
Jessilyn Persson: [00:07:22] Because you do it so well.
Brian Persson: [00:07:24] Because I, and yeah, but again you have to have those conversations to even figure out, you know, what is positive what is negative about real estate investing. And then, you know, it goes way past tenants. There's, we have people who we deal with that they don't like debt, right? But part of real estate investing is debt. You almost can't get away from it in a good real estate investing environment.
Jessilyn Persson: [00:07:52] Right. And not all debt is bad.
Brian Persson: [00:07:54] No, not all debt is bad. It's a matter of how you manage it. But people will come in and they absolutely do not want debt or debt terrifies them. And you really have to have those conversations around it to figure out, okay, what about it is the negative aspect, like what about it is giving you these negative emotions that you want to avoid debt so badly and yet still be a real estate investor?
Jessilyn Persson: [00:08:19] Right.
Brian Persson: [00:08:20] Yeah, there's a lot of different aspects that you and your partner have to have conversations on in order to figure out the whole real estate investing sphere.
Jessilyn Persson: [00:08:31] Yeah, a great question to ask around the looking at the resistance and the fear is, if you could have a magic wand and make real estate investing do anything you want, what would that be? And I would highly recommend that you be real honest with yourself to your partner, with your partner, and with yourself. You know, because if, had I done that back then with you, or we had done it and been really honest, I would have up front probably been straight out like, yeah, I don't want to manage tenants. I don't want that midnight call, you know, with a leaky toilet or flood or something. Right? But a lot of times we think, oh, it won't be so bad or I can manage it. And then the time comes and you lose your mind or just impacts you so bad in your whole life, and then you just kind of step away from it, but have those conversations up front. I know I've had many conversations in the last few weeks with a lot of, uh, ladies who are looking to do real estate investing, and I always ask them why, like what's the big vision? And sometimes it'll be as big as like, you know, I want to have multiple properties across the world, and I want to learn the property management, and I want to learn the project management for the renos.
Jessilyn Persson: [00:09:38] And I'm sitting there going, but do you? Like do you really? Have you thought that through? And if you think you do, that's good. But make sure you've actually thought it through. Because as a project manager myself, as a property manager yourself, as real estate investors, we can look at the whole picture now and go, yeah, no, like there are just some things you don't want to do, there's some things I don't want to do, and there's some things they're not worth learning because the mistakes can be expensive. If you think you can do it and you find out later what everything you didn't know about it is causing you thousands of dollars in repairs or whatever it's going to take. So be realistic with what you want to do and what you want to learn. It's okay to want to learn it too, but also understand the impact of that learning. Like it's going to take time, it's going to take money, it's going to, you know, and so if you're going to explore all these avenues before you jump in, you're so much further ahead of the curve.
Brian Persson: [00:10:33] Yeah. I think we, I think as humans, we all run around thinking we have a cape on our back and we're Superman and can take on everything. But the reality--
Jessilyn Persson: [00:10:42] -- Superwoman --
Brian Persson: [00:10:43] -- yes, Superwomans and Supermans. Yeah. But the reality is, you know, people have different levels of grit. And real estate, you got to have a certain level of grit for certain aspects of it. And just as you said, if you can be really honest with yourself and ask yourself, do I really want to take on the tenants? Do I really want to take on the debt? Do I really want to take on whatever it looks like in real estate? And if you get that feeling, like just that ugh feeling, then you need to have a deeper conversation on that. Maybe you got to go out and find somebody with experience and see what their opinions are on it, because otherwise you're going to get into it and you're either going to hate every moment of it or you're going to fail in a way that maybe was bigger and deeper than you expected it to be. So you gotta really have that deep conversation on who you really are and what you really are capable of.
Jessilyn Persson: [00:11:44] I love that you said different levels of grit, not to be confused with having grit as a whole, and I can speak to that personally because I have grit, right? And I know I do, and there's a lot of things I've persevered through and been very successful in. But there's things where I don't have grit and I don't want to, you know, but it took me a long time to admit and own up to. It wasn't that I couldn't do it or that I was a failure at it, it was that there was just no love or passion behind it. And if there's no interest and desire, it's going to fall flat. And it's got nothing to do with your capabilities and everything to do with what motivates and what drives you.
Brian Persson: [00:12:32] Yep. We have friends who are real estate investors and know people who are real estate investors, and we watch them with their different levels of grit, and they are phenomenal at certain things. And then their portfolio just languishes in other things because they have absolutely no desire to take that on and carry that burden. And it shows up in their portfolio. You have this kind of, you end up getting these lopsided sort of portfolios that are very, very good at one thing and suffering in another thing.
Jessilyn Persson: [00:13:07] Yeah, 100%. All right. Takeaway number two, discuss what you want as a couple. Now this lands in the define on our framework. Define what you want. So what do you want to achieve in real estate investing? And set measures for success and measures for failure so you have something to look at and compare as you go down this journey. I know for us, when we first landed our first property together in 2009, I was excited and decided that day that I wanted to buy a new property every two years. I mean, that was what I wanted to achieve. That was one of my measures of success is new property every two years. But I didn't discuss that with you. Therein lied part of the problem.
Brian Persson: [00:13:59] You might have voluntold me, but I don't think it was really discussed. Yeah. So you have to decide what you want to achieve. That's for sure. And it will change. Don't feel like whatever your real estate goals are today are going to be set in stone and five years from now, they're going to end up being the same. They're going to change. So for us the goal has changed significantly, probably on about every three year basis. We up our goals and change aspects of the portfolio to suit our life better. And you need to have that conversation over and over again to continue defining what your goals are. Even if you haven't quite achieved them yet, your life is going to change and you need, you can't be inflexible and have your life evolving and your goals not evolving.
Jessilyn Persson: [00:14:57] Yeah, but even if you have achieved your goals, then definitely regroup and set bigger, more audacious goals that you can work towards. I mean, you want to talk about when you're defining it, what do you want for yourself, for your partner, for your family, and define what that really looks like. Include what you are and you aren't willing to do because those are the big clinchers is when if you don't define what you are and aren't willing to do, when you get stuck doing what you don't want to do, that's where the bitterness, the resentment, the anger comes in. And that's where it can start to crumble the foundation of the portfolio, the partnership, the marriage, the family, whatever it is and where. But it impacts it all as a whole at some point. So yeah, really defining what you are willing and not willing to do also makes it clear for your partner. It's like setting those agreements. Like for example, we know you are managing the clients and I am not. That's an agreement we have. If that ever changes, it's because we had the conversation. But I will never wake up one day and go, I'm managing the client or the tenants today, right? Like that's just not know how it's going to happen.
Jessilyn Persson: [00:16:15] But we always, like I want to say yearly but that's not even true, I'm sure every if not every month, every couple of months, we talk about our real estate portfolio and our investment portfolio, and we review it because we both I mean, love talking about that and planning it. And we'll throw in different ideas about how we want to change it, how it might look. You'll ask me for feedback. Again, it's not everything lands on your shoulder. Like great example, you just did a few new leases that were coming up. And you were kind of hesitant and looking at some things because we needed to increase our prices, which we haven't done significant increases over the last couple years. But with inflation and the price of things and us having to do some rentals on some of the properties, we had to really review our portfolio performance, what the market is doing, and you took that to me and said, what are your thoughts and what are your opinions? And so I obviously also did a bunch of research just to understand. And I brought you my perspective. And then from there you created the contracts for our tenants.
Brian Persson: [00:17:15] Yeah, it was a tough decision because our entire portfolio is in a fantastic position right now. And inflation is obviously throwing a wrench into that. And the problem is that as you change things, you need to really predict how those changes are going to impact your portfolio. And my issue was as I changed things, I see these down the road effects that are going to start throwing things off. And I was very, very hesitant to change things. So I knew I had to come to an outside source like you and get another opinion and say, hey, what is this really look like, like can you, like, reframe this for me? And then you did. And then I was able to pick up the torch after you reframed it and carry it down the road a fair bit further and ultimately come out to something that was very workable for me, the tenants, and the portfolio and everything. Whereas if I didn't do that, if I didn't have that conversation with you, I think in probably a few years that portfolio might have started to suffer some issues. Yeah. Whereas now the forecasting is there, you know, we've predicted everything out to a couple of years from now. And I'm totally happy and stable with everything. It could not have gone that way without a conversation.
Jessilyn Persson: [00:18:39] 100%. And it's good to get a second set of eyes, especially if your partner is, you know, likes that world where they're looking at numbers and research in the market. And I mean, I know not everyone does, but to give a little bit more of a deeper understanding of what we're talking about, like, you could have gone forward with the leases as is and we would have been fine. You would have covered our bills for the next year or two. But the things that aren't at the forefront that maybe weren't on top of mind for you are things like, okay, we need to replace the shingles and the windows and you're going, oh, and now we're going, okay, there's at least 20, 30 grand. We know this is coming up. And then what about mortgage renewal? That was a big one. It's like okay, we're good for the next couple of years as we're locked in. But when that comes up for renewal, we know the interest rates are higher. So is that going to cover the cost from that perspective and then also like you said inflation. So we include utilities with our rent deal. So as the cost for electricity and heat and water and all that goes up, is that going to continue to be covered in our portfolio. So there's just, there's a wider look when you're looking ahead say 5, 10 years versus just 1, 2. And that's where we were able to come together and look at the bigger picture. And then you take that away, break it down and figure it out.
Brian Persson: [00:19:57] Yeah. Money was one thing. And this is where the conversations are so super important because you have a lot of very important topics here inside of a relationship that they're getting all mixed up together and you really got to sort them out. So we had money issues inside of that. Like not issues inside the portfolio. But like everyone has money issues out there. They have different opinions on money, different feelings on money, different ways they're going to act on money. And we had to figure out the balance between how much do we upset the portfolio, which is going to cost me a huge amount of time down the road, versus how much do we profit on it right now, right? Like we have to adjust for inflation, we have to do all these things, but there was this balancing act and then we had to have a really deep conversation on money versus time because we have, we're in a spot right now where we're very comfortable trading money for time. And so in this case we had to have that conversation on how much time are we going to give up for how much more this portfolio is going to be profitable.
Brian Persson: [00:21:11] And that's where the grit comes in that we were talking about earlier, because I knew that changes, if they weren't really carefully managed, are going to cause me to come right to the edge of my grit. And I'm going to be losing my mind with trying to keep the portfolio together because we've made too many changes too quick and threw it into chaos.
Jessilyn Persson: [00:21:35] Yeah.
Brian Persson: [00:21:35] Yeah. So there's a lot I mean, we're talking about a really deep conversation here and complicated conversation in real estate. But the idea is that if you and I did not have that conversation together, how would we have come about three months or a year from now and things are starting to change where you didn't really have the conversation, and now you don't really know what thing, what is actually happening. And now your relationship is under stress. Now the portfolio is under stress. You have all these different stressors hitting you and sometimes it would be hard to figure out where those came from. So have those conversations, define what your future should look like, and make sure that you're both on the same page.
Jessilyn Persson: [00:22:22] Yeah. And that lends in well to takeaway three which is design how you're going to get there. Right? So who is going to be responsible for what work. I know we discussed this a little bit there, but that's a great conversation if someone is really good with dealing with the business side, like looking at MLS, talking to the realtor, lawyer, mortgage brokers, banks, then let that person run with it. And the other person always is going to be informed, they're a partner, they're part of it, but if they don't need to be, you want to make sure you're cognizant of your time too and how it's spent.
Brian Persson: [00:22:55] Yep. For us, going and being in front of the tenants is my thing. You love scheduling. You love making sure everything is clean in the calendar. So a lot of that stuff I just push on to your shoulders. And we've had many, many conversations and revisions over exactly like the responsibilities of either party and who's going to handle what. And for us now, it's just kind of second nature.
Jessilyn Persson: [00:23:22] Yeah.
Brian Persson: [00:23:23] And we still have conversations to revise it. You got to because again, life evolves and things aren't going to stay the same all the time. But you really do need to have a responsibility list.
Jessilyn Persson: [00:23:34] Yeah, 100%. And when you're talking about the design of how you're going to get there, talk about what can we do today to start this journey, like what's the timeline? What timeline do you and your partner want for this to evolve from right from when you're going to start it, to how long you want to have it, when you anticipate exiting? Now, I'm not saying go into depth about exiting when you haven't started, but like, just keep it in mind that it's going to be part of the conversation. And who do you need to involve? Partners, right? Whether it's your, like we said, mortgage broker, realtor, lawyer, maybe it's your parents for babysitting. And just make sure that you guys are starting to line that all up so you're ready when you decide to take those steps.
Brian Persson: [00:24:15] Yeah, that's one thing we didn't do early on is build a real team and go out there and interview lawyers and accountants and different people, and we kind of just fired off to whatever lawyers, you know, were the lawyers of the day whenever we bought a property. And that really didn't, that worked okay. I mean, the lawyers still get the paperwork done, but ultimately, you should take that extra time to have an interview with a lawyer or like a number of lawyers, and a number of other professionals that you're going to need inside of the real estate space, including, you know, as you said, perhaps your parents for babysitting, perhaps the babysitter themselves, interview a few babysitters. Who's most flexible to your real estate schedule that you're trying to design? That all kind of came together for us haphazardly because we just did it as we needed to. And I think we, I think if we had had that opinion to have those conversations ten years ago or more, we would have been in a little bit more comfortable spot right now. Everything would have been a little bit smoother at the beginning.
Jessilyn Persson: [00:25:23] Oh for sure. And the same goes with like, I know you mentioned the lawyer, but your mortgage broker and your realtor and I say that with a little bit of emphasis because we didn't, we just used multiple mortgage brokers over our portfolio, multiple realtors over our portfolio. But learned the hard way later down the line, like not every mortgage broker or realtor is familiar when it comes to real estate investing. They can do a mortgage, for example, but they might be used to just your kind of typical home buyer, not someone who has multiple properties so they don't know all the rules. Same with a realtor. When they're looking for properties, they can help you look for a property, that's not the hard part, but if they understand that you're an investor and what your plans are with that, that's a different way to be reviewing property and the numbers.
Brian Persson: [00:26:09] Yeah. We just recently had a wealth event that we put together, and we had every manner of person in that room from people who were starting out to people who had already ten properties or more. And it's very interesting talking to those people because, you know, they have very, very different opinions on where they are in their real estate journey and the way that they interact and communicate and know how they got to go about talking to people is very different from a beginner to an experienced investor, and you can tell that the experienced investor has had to go out and have those conversations, and is consistently in conversations with people to keep the portfolio alive. It's not just a matter of, you know, how smart and how fast can they move. There's a lot of conversations that have to happen to bring people into your ecosystem of that portfolio.
Jessilyn Persson: [00:27:06] And I know one thing we've talked about before and we'll mention here is just a little caution around working with family, who may be experts in the field, but not necessarily experts in investing. So if your uncle is a mortgage broker, that doesn't mean you should just use him because he's your uncle. If he has experience in, you know, real estate investing in mortgages, perfect. But if not, you may want to look for someone who does. Same with the realtor, your lawyer, whomever it is you need as professionals. Just a little caution, family isn't always the best choice.
Brian Persson: [00:27:43] No, family and friends are very common stories to use as professionals because they're comfortable, right? You know them. You know what their personality is like. You, maybe you just are easier having a conversation with them as compared to somebody new. But yeah, as you were saying, you really got to go deep into what they're all about inside of their profession, because not everybody is created equal, and just because you're comfortable with them does not mean that they're going to do the job that you need to do.
Jessilyn Persson: [00:28:17] Yeah, for sure. And a lot of times I find family and friends really are hesitant to have that conversation, that conversation that you might need to hear, but they don't want to hurt your feelings. But in the end, it's going to hurt your pocketbook. They don't want to share that with you. Yeah, that's not where you want to be. When you're designing your plan, make sure you align yourself with other like-minded people. It just helps to have that support, the mentors, people who've been there. And don't forget to celebrate your wins and successes. So work that into the budget when you're designing what you want to do for your real estate portfolio.
Jessilyn Persson: [00:28:52] So to recap the takeaways, first, discuss the resistance and fears you and your partner have when it comes to real estate investing. Then discuss what you want as a couple. And lastly, design how you're going to get there so you're both on the same page with the same plan. Our next topic is going to be about how to get educated together. This allows for both of you to hear the same facts and stories, and it gives you different perspectives and ideas to talk about when you're on your own.
Brian Persson: [00:29:21] We release podcasts every two weeks. Be sure to hit the subscribe button on your favorite podcast app to journey with us and create your life by design.
Jessilyn Persson: [00:29:30] Thanks for listening to the Life by Design podcast with your hosts, Jessilyn and Brian.