July 25, 2021

JF2518: Reaching Financial and Time Freedom with Ali Boone #SkillsetSunday

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While spending 5 years as an aerospace engineer, Ali Boone put any time and energy she could into leaving her corporate job. Now, she’s training others how to hack their minds before hacking their wallets in her new book, Not Your How-To-Guide to Real Estate Investing. Today, she’s sharing specific hacks for saving time, money, and your sanity. 

 

Ali Boone Real Estate Background:

  • Owner of Hipster Investments, focused on helping investors purchase turnkey and off-market rental properties
  • Current portfolio consists of out-of-state rental properties, primarily turnkey, and more recently added Southern California properties in Venice Beach
  • Hipster Investments managed to facilitate over $18M in real estate in its first 5 years in business
  • Based in Venice Beach, CA
  • Say hi to her at: www.hipsterinvestments.com/besteverfreebook

 

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TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? Welcome to the Best Real Estate Investing Advice Ever Show. I’m Joe Fairless. This is the world’s longest-running daily real estate investing podcast, where we only talk about the best advice ever, we don’t get into any fluffy stuff. With us today, Ali Boone.

How are you doing, Ali?

Ali Boone: I am so good. And I’m so glad to be here. How are you?

Joe Fairless: Well, I’m so glad that you’re here, and I’m doing well. You are a returning guest. Actually, episode number 40 is when we first introduced you to the listeners and it was titled Love is in the Air: Matching Investors and… Something, I’m clicking the link. Let me—

Ali Boone: I mean, you’ve got to bring a little love to this industry, right?

Joe Fairless: Yes, exactly.

Ali Boone: Nobody does, so—

Joe Fairless: Why not? Why not? And Episode 40 – anything goes when you’re only 40 episodes in, and now you’re over 2000. Which you might say the same—

Ali Boone: So awesome.

Joe Fairless: —thing over 2000. So that was one episode, episode 40. So if you want to hear Ali’s best ever advice, then go check out that, which aired October 13, 2014.

Ali Boone: Seriously?

Joe Fairless: Yes.

Ali Boone: Oh my, I may have to go back and listen, I wonder what my advice was—

Joe Fairless: Yes.

Ali Boone: —in 2014.

Joe Fairless: Yes, it’s been a little bit.

Ali Boone: Wow, I had no idea it was that long ago.

Joe Fairless: Yep, and then Episode 1972 titled The BRRRR And Turnkey Combo Approach on a Skill Set Sunday. And today, we’re taking a little different approach to our conversation and we’re going to be talking about some things we can learn from Ali’s new book, which is titled, NOT Your How-To Guide to Real Estate Investing: Life Lessons on Hacking Your Mind Before You Hack Your Wallet. And clearly, from a mindset standpoint, this is going to be helpful for any investor listening to the show, regardless of what your focus is.

Really quick, a couple things about Ali if you don’t have a memory like an elephant back from 2014 when I first introduced her… She’s the owner of Hipster Investments; they focus on helping investors purchase turnkey and off-market rental properties. They’ve facilitated over $18 million in real estate in the first five years. She’s based in Venice Beach, California. So that being said, Ali, just real quick, do you want to give the Best Ever Listeners a refresher of your background? And then let’s get right into a couple of lessons we can learn for Hacking Our Mind Before We Hack Our Wallet.

Ali Boone: Sure. So the super short version of my background is I grew up with a very typical mindset of go to school, get good grades, get a good job and have job security and retire when you’re 65. So I went that route, and I come from an aviation family. So I had gotten my pilot’s license and I ended up getting a degree in aerospace engineering because, hell, what better to get job security and do that thing your quote unquote—

Joe Fairless: Yes.

Ali Boone: —“supposed to do”. So I did that. And I went into the field of aerospace engineering, and I lasted not, maybe 30 seconds; I hadn’t even sat down in my chair yet before I realized I hated it. I was like, “Oh, hmm.”

Joe Fairless: Literally, you didn’t sit down in your chair before you—?

Ali Boone: I had not sat down…

Joe Fairless: How did you know that you’d like it?

Ali Boone: I don’t know. I can picture the image in my head. So now mind you, it was in grad school, I was flight instructing, and that was my job while I was in grad school. So my office, so to speak, was the sky, and adventure and airplanes and all this excitement.

Joe Fairless: Yeah.

Ali Boone: So then I land, again, air quotes, “the dream job”. So I show up with my business casual clothes that I already hated, and the person walking me to my cubicle, I’ll never forget, turning into the cubicle, it was just like life stopped right there and I looked this gray, drab thing. And I swear I didn’t even take a step before the voice in my head was like, “Uh-oh. This isn’t going to work.” So I did end up sitting down in my chair. And I sat there for five years, I had a couple job position changes in there. And I did some really cool stuff. It really was the dream job. It just wasn’t my dream job.

So I spent that entire five years that I was there trying to figure out my way out of corporate, and fast forward in, I didn’t really mean to choose real estate, but that’s kind of how it panned out. I actually talk about it a lot in the book, just for the process that I went through to find the thing that works. And the entire last part of the book is those exact steps that I took to get me out of corporate can also get you into real estate or whatever you’re trying to do. So I really break that down; but I left corporate in 2012. So I’ve been doing this real estate entrepreneur thing. And if you catch me on different days, I may have different words for real estate entrepreneur thing…

Joe Fairless: Right. Me too.

Ali Boone: There might be a couple of extra words sprinkled in there. So let’s see, I officially started real estate in 2011. So I’m right at the decade mark. And it’s been really cool, because I was investing in my own properties, but I’ve also been helping other people buy a property. So I feel like I’ve really seen — well, I never say I’ve seen it all, because as soon as I say that, something blows up. So it’s been quite the adventure, to say the least.

Joe Fairless: Before we get into some specific life lessons for Hacking Your Mind Before You Hack Your Wallet, why did you write this book?

Ali Boone:  I’m so glad you asked that. I wrote this book because what I’ve found — I spent those five years just trying to find anything to get me out of corporate, and what I’ve really found from reading books and everything else, was I either  was going to have to start a business or invest in real estate. So mind you, I was at the very beginning, like a lot of people are, to get into this fairly complicated industry. And it’s not complicated so much from the logistics standpoint, it’s just that none of us learned any of this in school.

So I know when I typed in “how to be a real estate investor” what’s the first thing you see? Flip a house, go wholesale, wholesale for no money down, all these kinds of things. And I found the navigation process of the whole thing really complicated. And that was without me using the big platforms that are out there now, like BiggerPockets and all those things, where on one hand, they’re incredibly helpful because there’s so much information available. But what I’ve really seen in coaching people and helping them with turnkeys, and everything else, is it’s almost kind of gone past the point of helpful; it is still to an extent, but there’s so much information out there.

So again, now you type in “how to be a real estate investor,” and there’s so much that comes  at you. And what I’ve seen over the years is that, to me, the mindset is more important than anything else. My theory is that if your mindset’s not right, there’s not a how-to guide in the world that’s going to help you. And what I’ve seen in the real estate investing industry is that it’s mostly “how-to” guides, and that’s great. Those are needed. But how do you choose what strategy to get into in the first place? How do you know what’s going to work for you? How do you do it without throwing darts with a blindfold on?

And really just kind of taking that step back, and I realized that sometimes mindset is not the most exciting thing, because when we are getting into real estate, it’s like, “Ah, I’m so excited. I want to get a property. I want to invest. I want to do all these things.” And it’s like, okay, cool. But can you pause for a second, take a step back, and really kind of put some thought into this as far as how do you set yourself up to choose a strategy that might be a good fit for you and not just go flying off into the deep end crazy town? So that was my motivation, is really my own mindset, the information that I felt like I was lacking getting into this industry, and then, again, working with a lot of other people, it feels like there’s this entire missing conversation. So that’s what prompted me to write this book, is to try and start that conversation.

Break: [08:02] to [10:03]

Joe Fairless: I remember when I first got started, about the time — a little bit earlier than when we originally spoke back on episode 40, in commercial real estate. And it’s a big daunting thing, commercial real estate, whenever you’re investing in something else at the time, which I was doing single-family homes… And I remember hearing Tony Robbins talk about 80% of mastering anything is psychology and 20% of the mechanics. And I thought, “Shut up, just give me the mechanics,” like just give me—

Ali Boone: Everybody’s like, “I want the mechanics!”

Joe Fairless: Yeah, “Give me the how-to guide.” But it’s right, because life is messy, and business is messy, and it’s not black and white; there’s a lot of gray. And if you don’t know how to navigate the gray mentally and emotionally, and perhaps spiritually, then the mechanics won’t matter, because there’s no book or “How To” guide that’s going to be able to let you know of all the different nuances that come with a deal or with a seller negotiation, or with a tenant skipping out on you. It’s just impossible for a book to cover all the different scenarios that could take place.

Ali Boone: Yes.

Joe Fairless: So ultimately, we’ve got to be equipped with the right mindset. So I completely embrace your approach. So what are some specifics in the book from Hacking your Mind? And why call it “Hacking Your Mind”? Why not call it “Developing—.”

Ali Boone: Something less aggressive?

Joe Fairless: Yes. Something less—well, something—

Ali Boone: Take a  machete to that thing? [laughs]

Joe Fairless: Something less, when I read “Hacking Your Mind” I think of a shortcut, because it’s a hack versus developing something for sustainability. So first off, will you address that? That’s just my perception, but will you just address that first?

Ali Boone: Mh-hm. No, I love that. So what I really found is when I started into real estate and specifically entrepreneurship, which when you’re a real estate investor, one could argue, if that’s all you’re doing, it still is a form of entrepreneurship… In my case, I was doing real estate and actually starting a business. And before that, when I was a pilot and an engineer, everything was very linear. I could control everything; if the airplane is not doing what I want it to do, I make it do what I want it to do. That’s what I’m trained to do with airplanes. And it was really stepping into entrepreneurship where suddenly it felt like I had no control over anything. And there were certain things I could control, but I couldn’t necessarily control the outcome.

And it’s a little bit the same with real estate investing as well with my properties – all I can really do with those is do the best that I can and learn as much as I can, and try to manage them as much as I can… Because at the end of the day, I still can’t necessarily control the outcome. It’s kind of like all you can do is the best thing you can do.

So what I really found in that journey, and what I’ve been going through in the last 10 years is really completely reframing my brain. Because my brain was used to being in control of things, it was used to be able to come up with linear steps to make something happen. And all of a sudden, everything I knew about my brain wasn’t working anymore.

One of my favorite reflections was in the very beginning – I’m in my first year of entrepreneurship, I’m making no money, I don’t know exactly how all this is going to work, and my brain was freaking out. And I finally sat down with myself — I probably sounded like a schizophrenic, but I sat down with myself, I was like, “Okay, look, brain, here’s what I’ll give you… We will give it until December 31st of this year to see what we can do. And on December 31, if things are not looking good, we’ll go back to engineering. It’ll be okay. Let’s just give ourselves” – I think at this point I was eight months, for example. “And we’re going to give ourselves eight months; you don’t have to worry about anything in those eight months, other than see what you come up with, and we’ll reevaluate December 31st.”

So December 31, comes around, it’s like, “Okay, let’s sit down, how are things looking?” And there was enough reason to believe things had started really picking up and it was like, “Okay, we’ll extend the trial period; we’ll extend it another three months, and we’ll reevaluate.”

So it was almost like tricking my mind, because prior to setting that little arrangement up, my mind was just freaking out. It was like, “Oh, my God, how are we going to get income? Who’s going to buy properties? How are we going to pay rent?” And I was like, cool, I appreciate that. So I had to trick it a little bit. And as soon as I set up that little arrangement – I’m not sure I have a better word for it – it calmed down. It’s like, “Oh, cool. Worst-case, we go back to engineering December 31. No problem.” So that’s why I put it in my head that, in a way, when I think of hacking, it’s kind of like, go around the norm, or you trick—I don’t want to say trick, trick isn’t quite the right word. But your mind oftentimes can try and be an entity of its own.

Joe Fairless: Right.

Ali Boone: It’s the inner roommate in your head, that voice in your head, it has its own life. And to some extent, you have to control that. And doing that, you have to teach it certain things. It’s like, “Hey, why don’t we look at this a different way?” So that’s what I think of hacking, as kind of hacking through all the weeds and everything else that we’ve all learned, we’ve all gotten certain messages in our heads, the things we thought are true may not necessarily be true… So how can you hack through all of that, in order to figure out where you’re going?

Joe Fairless: So now, that is a good segue to a couple of specific hacks that you wrote about in your book. What are a couple things that we can learn about during this conversation?

Ali Boone: So I’m going to save my favorite for last, I’m going to start with just kind of a basic one, and actually, because you alluded to it earlier, is one of the hacks is so basic – it’s reframing the idea of failure. Because so often people don’t get into investing because they’re afraid of failing, whether they are even aware that that’s their fear or not, people have this huge fear of failure, whether if they fail, what does it say about them? They should have been able to do that, on and on and on. And real estate investing, of all industries, guess what? If you’re in it for more than about five minutes, something’s going to fail. That’s just part of what it is. And not to be all cliche about it, but it’s that whole, “If it was that easy, everybody would do it,” kind of thing. But it’s true, because you were talking about getting knocked down, getting back up. And that is absolutely required for real estate investing, because it’s just going to happen. Maybe some people scoop by with a few properties and don’t have anything major, but for the most part, most of us are going to hit that failure point.

So I talk a lot about failure, and really just, a) realizing that—I even changed the word. I don’t even want to call it failure, because failure suggests something that I don’t think it is; I think it’s a learning opportunity. And later in the book, I go through what happens when you quote unquote, “fail”. And the best thing you can do is give yourself a second to process it, you don’t want to completely ignore your feelings about it. But then look back, where could you change things? How could you make things better? And use that to move forward. And if you look at any of the great investors out there, you’ll see that they’ve all done that – Bill Gates, Buffett, all those guys, how many millions of dollars have they lost at some point over the course of their careers?

So you have to get back up. That’s just kind of a basic one that oftentimes I feel like we all kind of know that that’s how we should navigate failure, but it’s kind of a reminder of, “Hey, that’s actually really important.” Perseverance. That’s a big one in this industry, just because, again, none of us learn this in school, there’s not a syllabus, there’s not a learning or a process for it, there’s not a step by step. It’s an on-the-job learning opportunity. That’s how it works.

Joe Fairless: And it reminds me of a video that I should have been watching, but  I was listening to it, because I was working out. It was with Jim Rohn, and he talks about how—he was interviewing someone and that person is really successful. And he had a kid, and the kid was a girl. And he’d sit down with his daughter who was probably 10 or 11 at the time, and he would ask her every day, what’s something that she failed at, and they would celebrate that failure.

Ali Boone: Aw, I love that.

Joe Fairless: And it was exactly what you’re talking about, is to condition her to understand that, “Hey, if you’re not failing at something, then you’re not pushing yourself enough.” And ultimately, clearly, we have to learn from the failures.

Ali Boone: That warms my heart, because I was fortunate to have parents that really built up confidence in me, and I think that’s a critical trait. And I’ve had so many friends, I’ve known so many people who don’t really have confidence, and I can’t imagine how their lives would have been different, or even my life would be different if you learned to celebrate the failures. Because at that point, there’s not really anything to lack confidence about. It’s like, “Yippee, I failed. Right on. What’s next?”

Joe Fairless: Yeah, exactly. Yeah.

Ali Boone: I actually heard a term today on Instagram, fail up. If you’re going to fail, fail up. And I was like, “Oh, man, that’s so good.”

Joe Fairless: Yes. When you celebrate, here’s what happened that didn’t go perfectly, that I was wanting to go perfectly, but didn’t. Well, you’re learning for how to optimize it moving forward. But I think even more importantly, you’re understanding that it’s okay not to be perfect, and therefore you’ll take more chances in life later. And ultimately, if you take more chances in life, and you’ve learned from all these failures intentionally leading up to that point,—

Ali Boone: Absolutely.

Joe Fairless: —you’re a savvy person when you do take those measured chances when you become a professional.

Ali Boone: And I think there’s also a spiritual side to it. I think there’s kind of an unsaid rite of passage. If you want to be super successful, it’s almost a rite of passage that you have to get knocked down. You’ve got to end up in the dirt; because anybody can start a business. It’s like, “Hey, separate the men from the boys here. Let’s see what’s going to happen. Hahaha” and it’s like—

Joe Fairless: Yes.

Ali Boone: “Yay, I failed. I’m so much closer to success. How great?!” And like they talk about sales people, they have to get 19 No’s to get one Yes, or something like that.

Joe Fairless: Right. Every no leads me closer to a yes.

Ali Boone: Mm-hm. Exactly.

Joe Fairless: Alright, so I like that one. But that wasn’t your favorite.

Ali Boone: It’s not. I was like, let’s start with a little more [unintelligible [00:20:18].14]

Joe Fairless: Alright, which one is your favorite?

Ali Boone: So my favorite one – this has been my favorite for a while and I was so excited to actually put it in writing… I’ve had a theory for quite a while that there are actually three true currencies in the world. Money, we all know, time and sanity. And everything I do in life, if I’m trying to buy a service or get something, if I’m trying to get something, I’m going to pay for that thing in one or more of those currencies, period. So I’ve always been involved with turnkey rental properties, which a lot of people totally trash on. They’re like, “Huh, you could get so much more money.” Well, okay, let’s put the currencies to this; money, time and sanity. For me, I would rather pay more money for something if it means I get to save my time and sanity. Sanity for me is number one.

And in the book, I actually talk about really thinking about how do you rank those currencies? Because when you understand that, it’s going to completely change how you make decisions. My favorite example being, I can’t tell you how many people I’ve heard from or have reached out saying that they want to start wholesaling. I’m like, “Great, that sounds cool.” And then they mention that they have a full-time job and a family of five. And I’m thinking, “When are you going to wholesale?” I would assume – I don’t have a family of five or that kind of job, but I would assume in that situation, that time is probably going to be your number one currency, because I can’t imagine that you have any of it. So if you’re talking about a strategy like wholesaling, wholesaling is the most active strategy possible, it’s work.

So a lot of people don’t really think that through, of “Oh, I don’t actually have any time. Maybe I should think about a strategy that doesn’t involve so much time or commercial investors.” I think of the beginner investors who want to make all the money, commercial is huge, huge for money and returns, absolutely. But at the same time, when someone’s just getting started and they have no idea what they’re doing, I would imagine their sanity is going to go swirling down the toilet when they have no idea what they’re doing. It’s kind of like, “Okay, cool. But you’ve got to build up a little bit and get there.” And money may not be number one right away.

So I go through a couple of real-life examples, like should you hire a housekeeper? Well, let’s look at it; money, time and sanity. How much are you going to spend to save your time? And depending on how much you like cleaning your house or not, sanity.

So I use it every single day, even in non-real estate stuff. Everything I do and everything I try and get, I’m like, “Okay, would I rather pay more money for it if it’s going to save my time and sanity?” Or “Do I maybe not mind giving up the time for it, because it brings me some kind of joy?” It’s a little bit of a balancing act. And I think when people really put those into perspective, it could change a lot of decisions for a lot of people.

Joe Fairless: That’s helpful, I like that a lot. It’s a filter in which we can look through and decide how to approach different decisions that we have, personally and professionally. I have something similar on my vision board, where I have my three priorities as a person. And number one is health, number two is freedom and number three is enjoyment.

Ali Boone: I love that.

Joe Fairless: And the decisions I make with my time are directly reflected in how I prioritize those three things. And clearly, there’s four through a million after that, but those are the top three; health, freedom, enjoyment, for me. So if I’m sitting around on my computer, I’m like, “What am I doing? Get my butt up on that walking treadmill and let’s do both” because health is number one. So it is being very intentional, in your case with the three types of currency, money, time and sanity. And the turnkey rentals is – surprise, surprise, that’s a beautiful example of that, where you could make more money, but you have to be more active. And same thing with syndications, right?

Ali Boone: Yep.

Joe Fairless: As a limited partner, passive investor, you could make more money if you were a general partner doing your own deals, but there’s a lot of time and sanity you’re going to sacrifice,—

Ali Boone: Yes.

Joe Fairless: —for that money.

Ali Boone: Yes.

Joe Fairless: And it’s just, what do you want to do? How do you want to invest your time? I love that.

Ali Boone: And if you think about it, too — someone brought up, I don’t know why I hadn’t thought about this before, but when people talk about financial freedom, everyone wants financial freedom. But if you actually look at that and if you actually ask people what it is that they really want…

Joe Fairless: Time.

Ali Boone: It’s time freedom.

Joe Fairless: Yes.

Ali Boone: It’s not financial freedom, because what does financial freedom get to you? Retirement. You get to do whatever you want, whenever you want. The finances aren’t actually what people are seeking, it’s that time freedom. And it goes to the currencies like, “Oh, I could make more returns if I got more hands-on.” Yes, I love the syndications example, it’s exactly true. Or you could do syndications, maybe you can make money elsewhere. But again, are you after financial freedom? Or are you after time freedom? And everyone’s answer is going to be different. My answer is gonna be different from the next guy, from the next guy. We all have different priorities and reasons for what we’re doing.

There’s a whole chapter about really thinking about your “Why”. And the stronger you can get your ”Why” the more you’re going to hang on and be able to persevere, because oftentimes our “Why” is a lot deeper than we even think it is. It’s like, “Oh, I want time freedom.” “Okay, well, what does that actually get me?” “Well, that gets me time with my family.” “Oh, now we’re getting somewhere, tell me more.” Because when you really connect with something, that’s what’s going to be your adrenaline and your motivator to just keep tracking, no matter how hard things get.

Break: [25:54] to [28:01]

Joe Fairless: A lot of listeners of this episode will likely be thinking, “Well, I understand the three currencies; money, time, sanity.” And a lot of them are probably thinking, “Well, during this period of time, I’d like to sacrifice time and sanity for money for, say, 5 years, 10 years and then knowing that I’m sacrificing the time and sanity to make more money to do my own stuff. And I will pivot at that point, and then reconfigure my approach and then focus more on the time and sanity.”

Ali Boone: Yep.

Joe Fairless: “And then have the money that I’ve accumulated during this sprint of 5-10 years, whatever it is, then have that work.”

Ali Boone: I absolutely love that, how you phrase all of that. I’ve been doing a lot more real estate investing coaching lately and everybody comes, they’re like, “I have a passive income goal of 5k a month or 10k a month,” or whatever. And a lot of times, exactly what you’re saying, is “Cool. But don’t forget the possibility of using active income to get passive income” and everyone’s like, “Wait, what? I want passive income.” Well, if you hit it hard for five years, for example, and you take all of that income and then at that point transfer it into passive income opportunities, you might be able to hit — because you can just pull money out of the sky and just have 10k of passive income right away. And most of us don’t have the capital to just make that happen instantaneously.

But yes, exactly how you described that. So in that case, it’s exactly what you said, where the money would be ranked number one; who cares about time and sanity for the next five years? Just do it. And then at that five-year mark, when you’re ready to start converting your priorities and then converting that active income into passive income in this case, it’s absolutely a huge strategy for people to remember.

Joe Fairless: How can the Best Ever listeners learn more about you and get in contact with you?

Ali Boone: I set up a link just for your folks,—

Joe Fairless: Nice.

Ali Boone: —where you can get information on me and contact me and all that. But probably more exciting than that is I have set up where you can get a free digital copy of the book, since we’ve been sitting here talking about it for so long. So the link is https://www.hipsterinvestments.com/besteverfreebook, all one word. And you can get a free digital copy there. There’s a link to Amazon if you’re a nerd like me and need to hold a book in your hands.

Joe Fairless: That’s me, too. Yeah.

Ali Boone: Digital books do not work for me at all. But you can at least get a free digital copy there. And I would love if anybody checks it out, to hear from you. If you can throw a review on Amazon, that’d be great. But I would love to be in touch with everybody and see what you guys think about the book.

Joe Fairless: Well, Ali, thanks for being on the show. Thanks for sharing a couple lessons from your book; looking forward to downloading it and also buying it on Amazon, because I am a freak like you, I only like the hardcopy and—

Joe Fairless: We are such the minority these days.

Joe Fairless: Yes, I know. I know. Well, thanks for being on show, I hope you have a best ever weekend and we’ll talk to you again soon.

Ali Boone: Sounds great. Thanks for having me.

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Joe Fairless serves as director of investor relations with Ashcroft Capital, a real estate investment firm. Ashcroft Capital is not affiliated with Joesta PF LLC or this website, and is not responsible for any of the content herein.

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The views and opinions expressed in this podcast are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. For more information, go to www.bestevershow.com.

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