Today Larry stresses the importance of treating your real estate business… like a business! Real estate investing is unlike any other career; one person can make a huge impact in their community and in the lives of the families who they work with, and it’s easy to forget that you’re doing this for your own livelihood. Just like with any sound property, a solid foundation of financial self-discipline is going to keep your business afloat for decades to come.
Each property has to pay for itself, and has to be able to sustain its own existence by making enough for the debt service, taxes, and upkeep. He suggests pulling the annual costs, such as clean-up after a tenant moves out or the property taxes, in monthly increments so you’re never accidentally spending what you need to pay the government. By focusing on pulling out your expenses first before you take your cashflow, you’ll save yourself quite a few headaches during your investing career.