Hi there! My name is Dustin Edwards and I am the owner and CEO of Beach Cities Management. One of the most common questions I get asked in life is how I got started owning rental properties. I love the opportunity to share my story of how I got started and will share it with you soon as well, but I think the best way to start to get to know me is the why behind the how! So here it is, my story of origin for Real Estate Investing…
I was eighteen, living at home with my dad, working as a cashier at Sam’s Club. For anyone not familiar with this mega retail warehouse, it’s a store that you can visit to buy almost anything in large quantities. It’s a perfect store to grab 200 rolls of toilet paper, 100 pounds of dog food, or an entire case of soda.
My job consisted of 3 different activities, depending on the need of the store for the day. The first was cashier: to tender sales for shoppers and ensure everything on the customer’s carts and flatbeds are scanned and paid for. As the cashier, my job would be to take everything out of the customer’s cart, scan it, and place it into another cart. Easy enough, but tougher on you physically than it sounds! Everything is sold in multiple quantity, which means that everything was big, bulky, and heavy. Eight solid hours of this repetitive task and I was physically drained and mentally bored.
The second activity was gathering carts and flatbeds in the parking lot. This was my favorite of the three. You were outside rounding up carts, helping customers load their cars and trucks, and virtually un-supervised. Things could be worse. You could be a door greeter…
Now my third and least favorite activity in the entire world: Being the door greeter. The job was to say “Hello” to incoming customers (who almost never replied) and to check to make sure they had a membership card. The reality of what this looked like was a semi-constant flow of people walking in with their membership cards held out for you to see (they knew the drill) and looking past you pre-planning their route in the store. It’s kind of like watching the movie “The Scrooge” when he’s in one of his visions of the past, present, or future where he sees everybody but they can’t see him. It gave me a feeling of complete unimportance and a real contemplation of “What am I doing with my life?”
One day, standing at the front entrance doors and bored out of my mind, I thought: I CANNOT do this for the next 50 years of my life! I didn’t know the solution, but I absolutely knew the problem. So I started to think of possible answers. The first thing that came to mind and probably one of the most common was that I would just apply for a different job. It didn’t matter if it was at Sam’s Club or anywhere else, just something different than standing for all to ignore! But this solution just led me to the next question, “Is it the activity of the job that was the only burden, or was it having to work at any job that was the real underlying problem? And that was it. It was the fact that I HAD to work in order to live. I had to work in order to afford to play, to do the things I wanted to do. And that’s when the epiphany hit me: I am not free…
What a crushing blow! I mean, isn’t freedom the first thing every American is entitled to? Shouldn’t everybody in the world have freedom? But that simply isn’t the truth of my then current situation and a high majority of the rest of the “working age” population. If you don’t believe what I’m writing is the truth, then try quitting your job and continue living life the way you do now. How long would you last? A week, maybe two? Or possibly you’re better off than the average person and could last almost six months? But when your savings account runs dry and the next month’s worth of bills roll in, what happens? Well, unless you’ve discovered the treasure at the end of a rainbow or a sunken pirate ship full of treasure, I’d say you’re forced to find a job and work a large part of most days that fill your week. This very common scenario isn’t freedom.
But what could I do about it? I certainly didn’t have the answer that day. In fact, over the next few months I thought about this problem just about every minute of every day. It would be fair to say it consumed me. The best answer I could come up with was this one: If I saved one million dollars and placed it into a high-yield savings account I could live off of the interest. Alright, I’ve come up with a solution! Only one problem: how long would I need to work in order to save this much money? Well, based on my current income and financial obligations, I would be able to save a thousand dollars per month. So in 1,000 months, or roughly 83 years, I’d be financially free! Yeah, not the best plan. But with no real savings, two hard-working parents that live paycheck-to-paycheck, and anyone I knew telling me working hard is the only way to get anywhere in this life, I continued to show up, clock in, work hard, and save what little I could.
Eventually I couldn’t take another day of the monotony that Sam’s Club so generously offered, and I took up a job at Circuit City learning how to install audio and security equipment into vehicles. With the big question still consuming me daily, I dove into this new job and found it interesting to learn a new skillset in a different environment. It was fun to meet new clients looking for something that would make their car emit more bass, radiate neon lighting from their car’s undercarriage, or start their engine from the push of a button on their remote attached to their keychain. I think I enjoyed the camaraderie of my fellow colleagues the most about this job. It was common to have friendly banter between each other and to “quality control” each other’s work criticizing the other’s soldering job on the wire kit we were installing. But even more often you would find the guy who finished their install job first climbing into the other vehicle their buddy was working on and helping complete the job. It was truly a team environment and nobody was left behind. We learned from each other, laughed with each, and ultimately looked out for each other.
After learning the skills necessary to install anything Circuit City offered to install in your vehicle, I was promoted to assistant manager. This was great! I received a new title that came with some authority and a pay raise! It was a slap on the back and a “that a boy” kind of reward for my hard work. I was very appreciative for the promotion and thanked the boss immediately, but somewhere deep inside me I heard a voice telling me this is just the kind of steps that lead somebody down the road of a 40 year career. One more thing that keeps you showing up every day and clocking in. This would definitely be one of the better “jobs” I’ve had. But in the end, it was still a job. Back to the problem at hand. How to stop having to show up for work!
It was at this time that I really sat back and started to ponder a few more things. I thought about the examples I had in life closest to me to mimic and learn from. The first was my father. First thing I can tell you is that he is an amazing father to me, and always seemed to put my brother and I first in his priorities. I learned that it is important for a child to be able to count on their parents for support and to be there for them. But I also looked at his career that he’s led and how he “brought home the bacon” (the money) to support himself and his family. During his working career he was a guy that always worked hard and wanted to do the job well. He showed up on time or early, did the job he was hired to do, and clocked out at the end of the day ready to do it again tomorrow. He really focused on security. He never wanted to have something that would risk his family’s future. And being part of the family that counted on his ability to bring money home to the family to use to live, I definitely appreciated that!
With this example I learned I too wanted security for my future family as well as myself. I didn’t want to go through life worrying about how next month’s bills were going to be paid. I also learned that I wanted to spend as much time as possible with my kids and to be involved with them. I can’t tell you how much I appreciated the times I had playing baseball with my dad as one of the coaches on my team! This kind of memory is priceless and can’t be bought. The only thing I wanted to do was to be there more often for my kids without a work schedule prohibiting this. I also didn’t want to have to work as hard as he did! I remember hearing stories of him washing buses all day to get some hours in. This doesn’t sound like a fun day at the office to me!
The other thing I thought about was the idea of security. When people think of a job, they often tie it to the idea that it brings security. But is it really? In the example of my father, everything felt secure until it suddenly wasn’t! One day he showed up to clock in, and he was laid off! Not to any fault of his own, the company was just “going a different direction” and decided to lay off all union workers that they employed. This decision left my father without a job. Now without the job, things were certainly not secure anymore. He worked diligently looking for another job to start the process of receiving paychecks again asap, but it was a long time until he found a job to replace the one he lost. And during that time “off”, he had a lot of time, but not anywhere close to enough money to keep the same life style. Financial sacrifices were made. This experience gave me the desire to figure out a way to really create the security of monthly income coming into my family every month, whether I had a job or not. I wanted to control my destiny, not a company that offered me a job!
The other example I had close was my mom. She was an escrow officer for many years, riding the cycles of Real Estate up and down throughout the years. I can remember vividly going to a private Christian school throughout my 5th grade year, playing baseball in little league, and eating out quite often whenever I was with my mom. She bought a new car that year as well, a Chrysler Lebaron, and it was sweet! (At least as a 10 year-old I thought so) We moved to a nice house in Fullerton to be closer to her work and our school, and life seemed to be going pretty well for us! But then by the time I was starting 6th grade, we had moved back to a less expensive house that was again farther away, went to public school because tuition bills just weren’t in the budget, and after a few more months my mom had lost her job. By that Christmas, we were a family that “flipped” horses for a living! This meant we attended the local auctions, bought low-cost horses that needed to be trained and usually brought back to health, and then we sold them to the public for a small profit. I can tell you, for the amount of hours training, riding, brushing, washing, and cleaning up after these horses, this job has to be the lowest paying job that existed for all of us! If I can remember correctly, it took roughly 3 months and probably 120 hours per horse to get them ready for sale and they would sell for usually $300-700 of profit. So if you break this down to hours, it would average you $4.17 per hour! And to top this off, this didn’t include the cost of food, brushes, tackle, soap and water, and anything else we had to buy to complete this process. You’ve probably guessed, but this business wasn’t a sustainable one for us.
My mom always seemed to be a hard worker as well. She would spend a very heavy amount of hours at work each week. She would usually leave each morning before we woke up for school, and not return until well after dinner time. There was usually just enough time to say hi to her and that we loved her before she would climb into bed to rest up for the next day. This schedule was usually done six out of the seven days each week while she worked for the escrow company. So as a child, when she first lost her job and we would be working together after school on the horses, I was a pretty happy guy! This was probably the most time I had spent with my mom that I could remember. It was my silver-lining to her predicament!
A few things I learned from these experiences with my mom are that the most precious asset any of us possess on this planet is time. There’s absolutely no substitute! Not being able to spend time with my mom during the week was hard to deal with as a child, both for me and my younger brother. We would do so many things (sorry, can’t tell my kids these details!) wrong out of boredom that it scares me to my core as a parent today. I mean, we had so much alone time after school each day that we would just look for ways to either get upset with each other and fight, or become a team and do things we were absolutely not supposed to do! But above all this, I missed opportunities growing up not being able to play team sports for these years she wasn’t home because there wasn’t anyone to take us or sign us up for them. We also missed time with parents that other kids got to spend with their parents. But its not all bad, and my goal in writing this isn’t to throw negative light on my mom. I can tell you for certain that I know her desires were much different than the reality we experienced. I know she wanted the best for my brother and I and she went to work every day trying her best in the best way she knew how to get ahead in life so she could give us more. This is where I believe my conviction to succeed roots from. I learned to not only desire more for my family, but through the reality of these years as a child, learned to accept nothing less than great results from my efforts so that the time put into work were meaningful so I could spend more time with my kids when they were home from school and I away from work.
I also learned that working this hard is best completed for a business that you own, and not work for. All the long hours sacrificed by my mom were meaningless to her future as soon as her boss decided his business no longer needed her there. I never want to give somebody that power over my family’s future. Through her example, she taught me that employees are really considered assets or liabilities, and as soon as you stop being an asset to a business, you become a liability. And like any good investment advice you’ll hear, businesses and individuals need to eliminate their liabilities!
So this is what I had and where I stood before I got started. I knew I wanted to find a better way to receive monthly income without having to “go to work” for it everyday, needed it to be secure and something I could count on being there month-after-month, and I wanted it to take care of my family and I for many years into the future! Is that too much to ask? At that time I didn’t know the answer to this question, but I was ready and willing to start a journey to find out…
My next post will be my story on “how” I got started from ground zero. You’ll walk down the path I took to acquiring my first property and what set me in motion to acquire so many more in the years to come. Thank you for reading my blog. I appreciate you and the time you’ve given it. I can only hope you find it interesting and hopefully take something away from it that will help you get to your next step in Real Estate Investing!