Easter is coming soon, and it brings about thoughts of all the things that we are currently told not to do. Things like Easter egg hunts, Church or religious events, and getting together with family and friends for an Easter meal.

In my house we have always had an Easter morning egg hunt. The problem for me was what to do with all of the extra candy. I tend the spend the next week gorging on it. Also, what about the eggs that never get found… until 6 months later… those are never a good surprise.

Out of this came what I like to refer to as the Easter challenge.

Around 7 or 8 years ago, I wanted to come up with something I could do that might teach a lesson, and remove some of the candy. At the time The parable of the talents had been on my mind. It had probably come up in church leading up to Easter.

In the parable of the talents, a master gives 3 servants different amounts of talents (large sums of money, to watch over, based on his confidence in their abilities, then leaves on a long trip. When he returns, the 3 servants report back. the first two showing that they took what he had given to them and had doubled it. The third came and said he had been afraid, and had buried the talent in the ground for fear of losing it. This third servant was scolded for not even giving it to the bankers to earn a small interest, and what he had was taken from him and given to the first servant.

To me there are multiple meanings there:

1. fiduciary responsibility. If you have been entrusted to invest or utilize money or any other item on someones behalf, you should do everything you can to be a good custodian of their wishes.
2. god has given you talents and skills, be bold, cultivate them, and let them be known, don’t hide them. If you hide your skills, burying them away, you will lose them

This brings me to the big question … What is the Easter Challenge

I wanted to create something that would build skills, and give my kids an opportunity to use their creativity, teach self-sufficiency, convey the concept that you must first learn to help yourself before you can meaningfully help others, and teach the benefits of service to others.

What I did the first year was to replace the candy in the eggs I would hide with money. This also made finding one 6 months later a much more pleasant experience.

Just changing to money in the eggs doesn’t accomplish the challenge or teach any skills. The next step was Easter day after the egg hunt. I issued a challenge, if you can take what you have, and double it, I will match the initial amount you have. You can do anything you want to double your money, as long as it is not illegal, borrowed, and you can show what you did.

Watching them get to work is always amazing in what they do and how creative they become. There is some guidance and help that needs to be given from time to time, but kids have amazing drive and creativity.

This year I plan to have a new challenge. I want to incorporate an income statement and balance sheet into this years goals, along with some charitable giving goals. I can’t wait to see just what they do!

In closing The challenge is all about promoting talents and helping them grow. Don’t let your talents wither and die! Feed them, make them grow, and become the amazing talented person you are meant to be!

Have you ever considered buying rental real estate that is not local to you, maybe only seeing pictures, or in a city you’ve never been to?

I had at one time bought 2 houses in the Austin, TX area. At the time I was very inexperienced and didn’t have a lot of the processes around this worked out. The two houses that I had bought in TX were both bought without a lot of planning behind them, both were new construction, and at the time while prices were nearing the peak in the of the housing bubble, we hadn’t given any thought to management, vacancy, or maintenance. Both of these housed never did well, one barely broke even, while the other lost money each month, because shortly after buying them, rents and housing values dropped. It was rough but we finally were able to get rid of these, I lost a lot on them, but was happy to finally be rid of them.

A few years ago, I had the opportunity again purchase a rental property that was not local. I thought I don’t have the ability to be there very often, but this time I want to plan it out better, and put a process around it. Below is the process I use in purchasing out of area real estate.

Review the properties

I start by getting specific in what I am looking for. An example would be “I am looking for a 2-3 bedroom house that is priced between $40-70k and either needs no work, or minor repairs”

Once you have this, I begin looking at houses that are in MLS, that wholesalers send for me to review, craigs list, Zillow, etc. I review these looking over the pictures and reviewing what is stated about the property and note all of the ones that meet my criteria. I also run rough estimates of what my costs vs rent will be to weed out ones that just won’t be profitable. In the end I may have gone over a few hundred houses, but will have around 10-15 houses on my list.

I’ll take my list and fly or drive to the city. I will spend a day driving the areas these houses are in looking at the following:

1. I’ll drive the neighborhood to see if it looks safe enough that I would feel comfortable going there if I had to.
   1. A safe neighborhood also will help in finding and keeping tenants.
2. Do the other houses in the neighborhood look well maintained and is the neighborhood free of trash and litter. I also want to see that there is not an abundance of board up houses.
3. I look at who is out on the streets.
   1. Kids playing = good
   1. Working age adults looking like they have nothing to do = bad
4. Finally, I look at the house (I don’t schedule a realtor I just look from outside).
   1. Is it in the condition it looks like from the pictures I saw
   1. Does the exterior look well maintained?
   1. Does the roof line look strait and the roofing look like it is in good condition?
   1. If there is an AC unit, does it look like it is in good condition.
   1. Does the yard look kept up, or look like the house has been abandoned.
   1. If I can see in a window, I look to see if the interior looks ok too.

Make an offer

After my trip to the area, I will typically only have 0 – 2 houses that met my criteria. Assuming there is one left. This is where I would make an offer, contingent upon an inspection. If the offer is accepted, I will fly/drive to the city again to meet with the inspector and actually go into the house. I will walk the house with the inspector, and note any items that are either safety related, or that could be issues that would be very costly to resolve.

The results of the inspection will determine if I need to back out of the deal or can move forward. In the event of a larger item, one criteria is, can it be resolved within a month. If so, I may either ask for a credit or to have the issue resolved prior to closing. If it is not resolvable, may take multiple months to investigate and repair, or has the potential to turn into multiple high cost items, I’ll back out.

Close on deal

I don’t always, but will try to travel 1 more time for the closing. This gives me an opportunity to drop by my property managers office with the keys, and go over the items I need resolved before placing a tenant. If I do a remote closing, I will send the keys and details through ups or fedex.

A couple of years ago I got involved in a mentoring program at my office. Initially I wasn’t sure what to think of it, and I really didn’t think they did the greatest job of matching interests, but overall the outcome was good. Initially I was mentor to one other, though currently I have two people that I mentor. Here is what I’ve learned in doing this.

Mentoring in a way is giving back some of what you learned in the past to help someone who may be less experienced in an area build themselves up more quickly. This includes not only teaching, but also going over failures you may have had in the past, and what you learned from those failures. Being open to admitting the mistakes made in the past is not only valuable to the person you mentor. It can also also help to give them some confidence, knowing that everyone makes mistakes and not to be afraid to try something new.

Mentoring can help to build your organizational skills. In preparing for a session, I will work out a plan of the topic I plan to go over. Planning ahead and having most of what I plan to go over ready helps to make the time more effective for both of us. At times there are topics that will lead off of what I had prepared for, but even then most of the items stay close to what was planned.

Mentoring can help you to grow both in what you are trying to share and as a leader. I have had a number of times where I have been asked something I don’t know, or asked to go over an area that I may know a little about, but it isn’t an area that I see as a strength. In some cases, if I know someone else who has a greater knowledge of the subject, I will refer them to that person,  or see if I can find some resources from that person. In some cases where I may be a bit familiar, it forces me to review some of the topics I may not use as often. Even when I work at this, I still run across things that I may not always know. In that case I don’t hide that I don’t know,but will work with them to try and find the answer.

I think mentoring is not only good for the person that you may be mentoring, but also helps you to grow as well. In the time that I have been mentoring, this has challenged me to grow both in technical and leadership skills.

I had been looking into buying a small trailer park recently.

We drove out to it, and took a look around. Initially it looked like a great deal, even though it seemed to need a lot of work.

On initially looking over the property, All of the trailers were owned by the current owner and were part of the deal. There was also a house included on the lot, based on what the initial costs were, the listing price was close to what I would think the house was worth. The house from the outside, looked like it was in OK shape only needing some minor work done to it. The trailers only had a few tenants, all of which looked like maintenance had been neglected. Most of the trailers looked like they needed some rehab work, though a few looked like they needed to be removed. In all, the initial look still looked like there was a lot of opportunity!

Everything looked good so I asked a Realtor for a bit more information on the property. I had also looked up the property tax on the property to verify it was around what I had been expecting. He followed up with the income / expense statement for the property, and the rent roll. In looking them over, because of the current high vacancy rate, I had expected to see it operating at a loss, but didn’t expect to see expenses anywhere near as high as they were. I started asking some questions about the higher than expected expenses. I had expected it to have negative income at first, but the plan in mind was that I would do mix of selling off some of the trailers to others who would rehab them, and would rehab some myself, in the end making the property profitable again. The answer to my questions came back and I found that there were justifications for most of the expenses. Though I thought many were a little inflated, one reoccurring one relating to the well on the property stuck out. I spent some time researching the requirements around it, and what the monthly costs should be, and in the end, though I think I can get the testing done for less, it still places a big enough expense that the property no longer made sense to purchase. Minus this one item, and the property would have been a great deal.