Think back to your biggest accomplishment. Maybe it was graduating from college, starting a business or even something personal, like losing weight, running a marathon or quitting a bad habit. What was the first step? Before anything got done, you had to start with the belief that you could achieve that goal.
What are your real estate investing goals this year? Whatever you hope to accomplish, it starts with mindset.
Kansas City’s John Wiley is a brand ambassador for Think Realty, and his progression as a real estate investor and mentor comes around to mindset.
“Since I was 7 years old, I learned to be in a real estate state of mind,” he said.
Starting out as an investor, Wiley paid $500 for his first property and did all the work himself. Seven years later, he had built a significant portfolio from those bootstrap beginnings.
In this post, we’ll highlight my discussion with John Wiley from a recent podcast interview. Listen to the full podcast below.
Shifting from thought to action
The mental shift for Wiley was a long time coming — he was 48 before he bought his first property.
“I became fascinated with real estate construction at the age of 7 when a neighbor was flipping a house. In the back of my mind, I always knew that one day I would get into real estate flipping.”
When Wiley was 48, he was asked: If you could start any kind of business, what would you do? That led to his first real estate purchases and projects — but the key was mindset. By being in a real estate mindset and knowing the market, Wiley was able to take advantage of the right opportunities.
“I had already been listening to books, planning, thinking. I knew what I wanted to buy, so when life brought me the opportunity, I was ready,” he said.
What would Wiley tell someone who has some reservations about real estate investing?
“From my own life experience, I find that everybody’s ‘why’ is a little different,” he said. “The great thing about real estate investment is that there is something for everybody’s budget, for everybody’s lifestyle and for everybody’s risk tolerance. My way isn’t the best way, it’s a way.”
Shifting from earning to income
“My goal was long-term cash flow. I was exchanging my time for dollars, and I wanted assets that would pay me long-term whether I was punching a clock or not,” Wiley added. “The stock market needed to be babysat too much, so I educated myself on real estate, and I knew if I got into the space it would work for me. I knew that success would happen if I would take the risk and do the work.”
Wiley sees a “rush to flipping” as a mistake that many new investors make because it’s so time consuming and doesn’t build long-term cash flow.
“How is that any different than any business that owns your time? Leverage cash flow. Eighty percent of my effort is buy-and-hold, and the other 20 percent goes to flipping,” he said.
Shifting from loving the property to loving the numbers
Wiley said that when he is flipping, he makes sure he is buying for no more than 65 percent of after repair value, including repair costs. If it doesn’t meet that criteria, he doesn’t get it.
“Every deal I’ve done, there’s always a surprise,” Wiley said. “I leave a 5 percent cushion in so that I don’t have to get upset when the unknown happens because I am prepared for it, and I have budgeted for it.”
Shifting from the individual to the community
As he moved into buy-and-hold properties, Wiley’s goal was not just about the bottom line; he also wanted to give dignity and hope to people in the inner city neighborhoods of Kansas City.
“I wanted to create homes people would be proud to live in,” he said. “Most of the buy-and-hold activity was out in the suburbs. I went into the inner city where there was a lot of inventory, and people needed affordable housing.”
In service to his community, he started a non-profit called River of Refuge, which sponsors working families out of homelessness into stable housing.
“Families get stuck because they can’t save first and last month security deposits. Seven years ago, I bought a hospital and converted it to create apartments so that needy working families could access affordable housing. I am so proud to have been a founding member of that organization,” he said.
Talk about a winning mindset — not just winning as an investor, but ensuring that people in the communities we serve are thriving as well. This is one of the most important advantages of working in real estate investment because it offers the ability to create positive outcomes for real people right in our local markets.