In a recent post, how to purchase a rental property, a frequent contributor, Danielle, reminded me of her father’s experience. The real estate agent pushed him to forgo the home inspection so that he wouldn’t miss the hot deal. He took her advice, bought the house, and found himself over his head with maintenance and structural problems. Some things can be fixed; many things can’t.

Know when an ugly property holds potential.

As you purchase properties, start with easy projects. Buy a property that needs a fresh coat of paint, new flooring, and a bit of scrubbing. I can’t stress this point enough: it’s easy to get yourself into more than you can handle, but you have to start simple. Ever see those property flipping shows? The people who always go over budget and over their estimated time are the people who haven’t been in the game for a while; they’re the people who can only envision the quick buck. Focus more on what you’re capable of doing.

As you purchase more properties, you can become more comfortable with bigger projects—fixing a porch, redoing drywall and roofs, updating the electrical. Sweat equity is the way you make money in this business; hiring subcontractors to do projects for you is a huge expense. The liability and workers’ comp insurance alone are out of most restoration budgets.

But is the expense worth it to hire these guys? I guess that’s something you have to calculate for yourself. We’ve hired subcontractors to dig sewer lines, put gas lines in, and install windows. Of course, we’ve also done all of those same projects ourselves once we gained the experience.

Know when an ugly property means you run.

If your first property has too many projects, you’ll get discouraged. You won’t want to be in the business any longer. Projects as simple as cleaning the bathroom sink take five times as long as they do in your own home… that’s why these properties are so cheap. I spent over eight hours scrubbing a claw bathtub once. If every project in the first house is of that magnitude, your “quick project” will be nothing but speedy. Months will roll by… and roll by… and roll by. You’ll start to wonder when you’ll ever be done. And worse, everyone will always be bitter and quick to yell.

I’d never advise someone to skip the home inspection unless that person has enough skill to be a home inspector himself. If you read plumbing handbooks and electrical code books for fun, then you might be on your way to going without the home inspector. We’ve hired a home inspector who did a very thorough job. But like I mentioned in my last post on real estate investing, you’ve got to crawl through the attic and wiggle through the crawlspace yourself, too. (Or have your partner do it! My next point…) My husband found a bit of mold growing in the depths of our crawlspace. Did the home inspector do a poor job? No—our discovery was above and beyond the requirements of his report. Should you perform your own thorough inspection? Absolutely.

Have a partner

As a girl sponsoring poetry contests, you can guess that I’m not one to slip into a one-foot deep crawlspace. Luckily, I have a partner who will. I’ve got someone to carry my 5 gallon bucket of plaster and open jammed windows. But more than anything, I have someone who equally invests himself in the work that interests me. The support system of having someone working with you in your nasty looking property often makes the difference between wanting to work and not wanting to work. A blasting radio while you paint isn’t enough.

The perfect partner has a different skill set than you. But more importantly, the partner has to be as equally committed. Buy those easy-to-do properties first. Your team will grow together before getting stressed out (or divorced!).

When I talked to my friend Heather* the other night, she had just gotten home from a long day at her nonprofit internship in Virginia and her voice was shaking. “I’m so scared, Danielle” she said. “You won’t believe what this cab driver told me.” Heather was living in an area that those in her wealthy suburban neighborhood in Massachusetts would consider a ghetto.

“Now, I don’t want to scare you or anything,” the cab driver told her, “but I feel it would be an injustice if I didn’t warn you about the area where you’re living.” The driver continued, “I actually cringed when I pulled up and saw you waiting outside for me.” Heather gripped her wallet for the duration of the drive. When they reached her house, he said “I would get your key ready before you get out of the car and run for the door. Don’t stand around outside fiddling for your key. Some of my friends even say that if they were cab drivers, they ’sure as hell wouldn’t go to that area’” Heather thanked the driver for his warnings and gave him a large tip. Not until she had walked up the “rotted, splintered” steps did Heather realize how fortunate she was. Many of the regular employees at her company lived in this area year round because it was all they could afford. Here she was, a privleged suburban kid living on her parents’ dime. “My mom would have gladly paid for a nicer place,” Heather told me, “but there aren’t any good neighborhoods for miles around.” Lucky for Heather, in six months she will return to the safety of her hometown, but for hundreds of people at her nonprofit this was all they could afford.

Heather’s story is not unique. When I interned at the American Cancer Society, my supervisor explained that he wanted to take me out to dinner to thank me for my hard work, but couldn’t afford it. Other friends I have talked to in the nonprofit world can barely make ends meet. The majority of the employees at Heather’s organization earn under $28,000 a year with the president only making $31,385. Heather is only making $50 a week on her stipend and on an average day she spends $15 of that on cabs because she is afraid to walk alone in her neighborhood or for that matter to the grocery store. Therefore, she also relies on private transportation to eat her dinner every night in a restaurant. The catch- she wouldn’t be able to afford to live even in the ghetto without her mom’s credit card.

Why is it that those of us who are committed to making a difference with our lives are forced to scrape by while the CEOs of Fortune 500 companies are earning millions in stock options alone? A DC lobbyist I know once commented that the best nonprofit employees either have extensive credentials and are only willing to devote their services if they get competitively paid OR are so passionate about a particular cause that they would be willing to work for free. I do not believe this is healthy for our global society, for it makes it difficult for anyone except the independently wealthy to afford to live comfortably while donating their time to a good cause. If nonprofits want to attract and retain a talented workforce, they need to start compensating their people better.

As a result of her internship experience, Heather who has dreamed of being an animal rights advocate since her sophomore year of college, become more cognizant of the personal sacrifices that would entail. As she put it, “I realized that, in order for me to turn my passion into a career, I would be forced to live in areas that I never imagined myself even visiting.” Heather feels torn between what she senses is her purpose in life and the hard shell of the real world. “I want to have a career that is meaningful,” she told me tonight online, but maybe a nonprofit isn’t the best way to go.” I feel the same way in the area of cancer advocacy. The bottom line- how can the children of nonprofit employees make their mark on the world if their parents are barely getting by? We need to consider the next generation of workers in America and how their college educations will be paid for.

Every so often, we like to showcase guest writers who are interested in sharing their perspectives. We call them our “Saturday Strategists”, and we love to feature their ideas.

Below are some of those guests that we have had in the past:

• Danielle, Her first article is Fruits of Our Values
• We had Michelle, ask us, “Life is a game, do you get it?“
• Mike from Buffalo, New York wants to help make sure you Diversify your investments
• CJ, who normally writes articles for his blog The Coin Jar, has taken some time to share his insight with us: How long could you last on a ‘job furlough?’.
• At age 90, the computer-savy airport owner, Duane, urges us to seize our time. He writes what I’ve learned in my 90 years.
• Alex shares the perfect goal of making money while you sleep
• Laura offers a wonderful story of adapting and growing: Before you blow your bucks
• Yuka shared some insider tips from Japan when she wrote a piece called Investments in Japan.
• When you work for other people, Martin inspired us when he asked, “Going the extra mile–where do I draw the line?“
• Comic web writer, Nick, made us chuckle when he caught Katie off-guard: You wanna earn sumthin’ you better be ready to put it all on the line.

Want to join our growing list of guest writers?

We would certainly love to hear your ideas and even help you with the writing process. To get a feel of what Aridni represents, read The Aridni Goal.

So if you are interested, let us know!

My mom laughed at the thought of Todd and me writing a website about money. She knew that neither of us had any money. Yet six months ago on this day, Todd and I made a website anyway. We wanted to write about our experiences as we MAKE money. We’ve since been cited on The New York Times blogs, learned more about ourselves and each other, met all sorts of great people and developed great ideas, and learned an enormous lesson:

You cannot let what others think ever stop you.

Today, six months later, my husband and I are being teased by my extended family. They’re here for the 4th of July and cannot imagine why we chose to purchase a particular investment property next to their insane sister. Okay. We toughen up and take the crap. We can’t let their opinions of their sister deter us. We think the purchase was INCREDIBLE.

Now my mom thinks that our website is incredible; she uses the RSS updates. Some day, maybe my family will say that our property purchase was amazing, too. Maybe they won’t, but I don’t care.

You cannot let what others think ever stop you.

Special note: Thanks Todd for the fantastic new layout. I have to admit, readers, that everything you see besides the words by my name are the works of this great guy—my fantastic Aridni partner.

Also, we’re thrilled to have Danielle join us along with our weekly guest writers… one of which we hope will be you, dear reader.

Since I read Eleanor Roosevelt’s autobiography at the age of 14, I have been determined to make a difference in the world through grassroots volunteer work and national public service. As I have gotten older, I’ve realized that to have the time to do these things, I’ll either need to marry well or make the money to sustain these projects myself. My goal is to become financially independent so that I can give back to others and do the things that matter to me. Due to my mother’s death from colon cancer 2.5 years ago, I want to start a foundation to support research and prevention for this disease. I also love studying and writing about history (my major in college), so I hope to find a career that will enable me to combine my passions in historical analysis, fundraising/selling, writing, and health policy. Unlike Todd and Katie, I have no formal training in business at all, but I am considering getting a MBA with a concentration in nonprofit management.

In 1920, an American woman was considered ambitious if she cast her vote on Election Day. Now women’s voices can go beyond the polls to actually having a say about who gets on the ballot in the first place. That’s because of women’s increased entrepreneurial success in the private sector which contributes the majority of funds for political campaigns.

According to Millionaire Women, Inc., “women are starting new businesses at twice the rate of men“! (7). Furthermore, “the number of women who are now building businesses has increased two-and-a-half times faster than all U.S. businesses, and female investors are the newest market for brockerage firms to pursue” (8). Now, more than ever, successful women are able to make sizeable campaign contributions to candidates who speak to women’s issues instead of hoping their husbands will support the interests that matter to them.

How can you join this growing crowd of female entrepreneurs? Millionaire Women says that information and inspiration are the two prerequisities to realizing wealth (6). In interviews with female Presidents and CEOs, including Hewlett-Packard Chairman and CEO Carly Fiorina and Avon Chairman and CEO Andrea Jung (8), Millionaire Women discovered that there are three secrets to success.

The first secret is: (Continue reading this article…)