Great information, so I wanted to share:
God’s Word Regarding Real Estate Debt
PROVERBS 22:7 – The rich ruleth over the poor, and the borrower servant to the lender.
If only I had been a student of God’s word sooner…. The pain I could have avoided and the good I could have done! Now, in a position to coach some of the top agents and make presentations all over the world, I’m careful in what I endorse.
Here are 15 changes that I would have made early in my career had I been a better student of the Bible:
- Lose the “big hat, no cattle syndrome.” I went into debt for big houses in multiple areas, fancy cars like a Rolls Royce under the false teaching of “fake it till you make it.” People respect your hard work and goodness, not your car.
- The real estate industry is still pushing for lower down payments and loans open to more people. When they cannot afford the payments, people find themselves being a slave to the lender.
- Keeping what you own and not risking your holdings on more leverage can be a little boring, but, in the end, it is the smartest financial move. Worrying about making payments lessens your availability for other important matters.
- Do you have enough money to tithe? You need to have better systems in real estate and less debt, if you do not.
- From now on, don’t bet on the market. Bet on the income. Sure, flippers make it when it’s good, but investors make it always. You can buy to flip, but it better have a long term cash flow just in case.
- Being positive after taxes is a misnomer. If you don’t have taxes to pay because of a bad year, then that means it is negative (negative cash flow.)
- Don’t borrow short on long term assets. You might own things longer, or their completion may take longer. Always go for the fully amortized loan.
- Before going into debt for the fancy office, assistants, third-party lead generators, and buyer’s assistants — learn how to generate leads by yourself and for yourself.
- The old ways are the best. Save for taxes, pay your insurance, and have a rainy day fund before you invest.
- Make it a goal to have no interest rate higher than the loan on your cash flow piece of real estate. Miss a payment at Lowes and it is 20.4%.
- Did you know the expense factor on a piece of free and clear real estate can approach 50% of its gross income? Know how to figure net cash flow on real estate.
- Make sure your weekly “perfect week” reflects your core principals of how you want to live your life. Is there enough time blocked for faith and family?
- What good are you doing with your money? After the income starts rolling in, let’s invest in God’s work rather than adding more feathers to our nest.
- Can you afford to give that good tenant a break this month?
- When you do get rich from this great business, do you give God the glory?
The funny thing is–I have always had all the breaks, the training, and the backing. I have been blessed in real estate and life. The only times that I have felt pain in my life is when ignored God’s word. Following the rules become easier after accepting Christ and allowing the Holy Spirit to coach you.
I can give you the real estate systems through books, software, speaking events, and coaching. What you do with your success and to whom you give the glory will be a matter of how good a student you are.