CHAPTER 1 - WHY I LOVE RENTAL
PROPERTIES
“My mission in life is not merely to survive, but to thrive; and to do so with some passion, some
compassion, some humor, and some style.”
-Maya Angelou
My eyes were glued to the nine simple words I held between my shaking fingers in that dark all-you-can-
eat Chinese buffet restaurant.
Surely it was a coincidence; it had to be, right?
Or perhaps someone was playing an extremely elaborate prank on us. No, that would be impossible. This
really just happened.
It was a hot summer afternoon, several days after my high school graduation. My best friend Matt and I
had decided to venture down to our favorite restaurant, a hole-in-the-wall Chinese buffet restaurant on the
outskirts of Minneapolis, to grab an early dinner. We talked about life, girls, our college plans, our crazy
friends, the latest small-town gossip, and all the other pressing issues that two 18-year-old guys in the
Midwest typically discuss over sweet and sour chicken, fried rice, wontons, Jell-O, and unlimited soda
refills.
As our conversation began to wind down, the tall, middle-aged waitress came to collect the dirty plates and
drop off our check. Neither of us reached for the bill, though; instead, we reached for the two fortune
cookies that lay atop the overturned invoice on the table.
“Brandon,” Matt asked, “as we grow up, do you want to live an ordinary life or an extraordinary one?”
As I held my fortune cookie, still in its wrapper, I thought about his question for a moment. I was an
ordinary kid in an ordinary town, with ordinary grades, an ordinary job, and an ordinary outlook on life.
Things seemed pretty good to me, so as I peeled the clear plastic wrapper off my fortune cookie, I looked
Matt in the eye and replied, “I’ll take an ordinary life. I’m happy with that.”
In reality, I didn’t believe I could ever achieve something more than ordinary, so why kid myself? I could
handle ordinary. I deserved ordinary. I was destined for ordinary.
I cracked my fortune cookie in half and carefully retrieved the white strip of paper nestled inside. Printed in
red ink were nine words I will never forget: “There is no such thing as an ordinary life.”
Why Do I Love Rental Properties So Much?
It’s no secret that I love rental properties.
Sure, flipping and wholesaling properties might be fun. Notes and tax liens might have fewer tenants. The
stock market might be more popular. But rental properties are my true business love.
Let me explain why.
Ability to Purchase with Leverage
Rental properties are great because you can borrow the bank's or someone else's money to increase the
potential return. This is known as leverage. In other words, you don’t need to have 100% of a property’s
purchase price on hand to be able to buy it. I’ll explain this more in depth later in this chapter, but for now,
I’ll say this: rental properties allow me to buy large properties for far less cash than I might need to
purchase stocks or other investments.
Ability to Hustle for Greater Returns
Not only can I leverage my cash, but I can also leverage my time and abilities to make magic happen in
this game—something difficult to do with other investments. In other words: I can hustle. If I want to do
the work needed to rehab a property, I can do that. If I want to leverage my networking skills to raise
money, I can do that instead. If I want to leverage my knowledge and time to find better deals that provide
an even greater return, I can do that. Rental property investing gives me the ability to hustle for my future.
Ability to Manage My Investment Directly
I’ll fully admit I’m a bit of a control freak, and that drives me toward rental properties in a powerful way.
With a rental property, I am directly responsible for the outcome of my investment. It is up to me to
analyze a property before I buy it; it’s up to me to ensure the property is in good condition to rent; it’s up to
me to ensure the property is running at peak performance. I don’t have to depend on some board of
directors in New York City for my life’s direction. I can manage my investments directly and personally.
People Always Need a Place to Live
The real estate market will go up and down, but the beauty of rental properties is that demand will never
end. People always need a place to live, so unlike investing in the latest tech trend or in your brother’s
start-up, real estate is an investment that will last. Furthermore, because increasing student loans are
making qualifying for a mortgage more difficult and our culture increasingly values mobility, the demand
for rental properties will only grow over time.
It’s Worked for Millions of People Before Me
Perhaps one of the greatest benefits to rental property investing is the proof of concept handed down by
millions of successful investors before us. Since the dawn of human civilization, landlords have build
wealth by owning and leasing out residential property. Today is no different, according to a joint survey
produced by BiggerPockets and Memphis Invest in 2012, “one out of eight, or 28.1 million Americans,
either consider themselves to be residential real estate investors or own residential investment properties
today.”
Fairly Stable and Predictable
Yes, events such as the market collapse in 2007 do happen, but rental property owners who were investing
for long-term gains did not suffer like those who were trying to be “fancy.” (Or as my good friend and
fellow landlord Jordan says, “punk drunk on greed.”) Furthermore, I would argue that the 2007 real estate
crash was predictable for those who were paying attention, because one of the defining characteristics of
the real estate market is the boom-and-bust cycle that never goes away. Once an investor learns to identify
this cycle, the old adage of “buy low, sell high” becomes much easier to achieve.
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