Hello everyone and Welcome to another
episode of Selling Greenville what I
like to call your favorite real estate
podcast here in the greater Greenville
area I'm your host as always Stan McCune
realtor here in Greenville County South
Carolina and I am happy to let you know
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today we're going to be talking about
assessing time in a real estate
transaction this is going to be a
two-part podcast I've actually
thought ahead on this I know it
probably seems like I think way ahead
on all of these I tried to but quite
frankly some of these happens for the
moment this one I've thought ahead about
and I've been mulling this over for a
while in my mind because we always look
at real estate from a money standpoint
particularly when it comes to investing
in real estate and especially when it
comes to flipping houses that's where
people really get into all these
different formulas and different numbers
and everything has to be exact but one
thing that usually gets left by the
wayside when people are assessing real
estate is they don't consider the value
of time and we've heard of course the
very very famous phrase time is money
there's a reason why that phrase is
famous it's because there are so many
layers to it there are so many aspects
in which time is money and because
that's true we know that it's true on
multiple multiple aspects of the
phrase times as money is true it's kind
of nearsighted to be crunching numbers
on real estate transaction and not to
factor in the time element of it now of
course some people will factor in time
from the standpoint of holding real
estate of course we know that that that
is an important thing how long you hold
your real estate means your holding
costs are higher the costs of capital
that it takes to to have that piece
of of property the aspects of you're
paying more for insurance you're paying
more for taxes blah blah blah I'm not
talking about that okay people factor
that in all the time I'm talking about
your time personally the value of your
time as a person and as it relates to
real estate transactions real estate
Investments that you're doing your time
is worth
money it and it has value and that
should be accounted for and this is
something that's a really big deal to me
when I'm assessing a real estate deal
for instance that I'm looking at
acquiring and as probably anyone that
listens to this knows I do some real
estate investing on the side it's not a
by any stretch a full-time gig it's
something I relegate to the side I
actually really don't I don't enjoy a
lot of aspects of of real estate
investing and so I tried to keep it on
the back burner as much as possible but
it just doesn't make sense for me to
operate in the space and not to use the
knowledge that I have to benefit myself
and so when I have a deal that my
clients pass up on that makes sense for
me I will take advantage of that
deal now when it comes to time here
is here's kind of the way I'm going to
to phrase this if time is currency okay
if time is money if time is currency
then I want you to think about it in
this way you're spending a lot of
it from a pretending that it's currency
you're spend spending a lot of it doing
the things that you
hate and let's say that you spend 5
hours a week doing the things that you
hate you're spending it it may only be 5
hours a week but in reality it is much
much more than that in the long run in
terms of how you feel in terms of how it
impacts your life if you're doing
something that you love from a from a
time is money currency standpoint you're
not spending anything you're doing
something you're you love you're you're
essentially using time and getting back
exactly what you want exactly
proportional value for the time that
you're spending so so you can say there
the other way to say that is that you're
not spending
anything and if you're just doing
something you're okay with to me I I
see that as you're simply working you
know what's a job a job is something I'm
okay with a job is something I don't
love it's something I don't hate it's
just something I have to do that and
I'm talking in in you know just broad
I'm painting a broad picture here that's
essentially a job at that point you're
doing something that you're you're just
okay with you don't love it you don't
hate
it and that is kind of that will kind of
help you to start thinking in terms of
okay how where am I going with this how
am I how am I approaching this so I
think that there are kind of four main
factors that I think of and and you
might think of more if you do please let
me know I'd be I'd really love to to
hear what you guys think about this I
think of four main factors when it comes
to time that assesses that kind of
determines the value of the time a and
that allows us to then give it to
assign value to it okay there's the
enjoyment factor which we just kind of
I just kind of introduced you to the
enjoyment Factor how much do you enjoy
what you're doing you're spending time
doing something do you really enjoy it
okay enjoyment Factor there is the
stress factor how much stress does it
bring to your life does it cause you to
lose sleep does it cause you to to
have emotional issues you got to go
to your therapist you got to take
anti-depressants I don't know what
type of stress does it bring you so
that's the stress factor there is the
third one the negative lifestyle factor
is what I'm calling it I had a hard time
naming this one but we'll just call it
the negative lifestyle factor and that
is when it's taking you away from things
that you want to do right so let's
say that you would really like to watch
the Super Bowl but man I you've got to
be over there at the house flip that
you're working on you know rewiring that
house or you're getting phone calls
during the Super Bowl from your
contractor saying hey we got a problem
here so there is a negative lifestyle
Factor and then fourthly there is a
missed opportunities Factor so as you're
doing this project over here how many
other opportunities are you missing out
on and and let me clarify one very
important thing here I'm not talking
about missing opportunities because you
don't have enough
money because that's what happens
right that for a lot of us we might be
tapped out financially whether we're
actually tapped out or whether we're
just at our comfort level Max we
don't have any more money to allocate
towards real estate and so opportunities
come up and it's like ah I got to pass
up on that that's not what I'm talking
about we're talking strictly from a Time
standpoint so because you're so busy
doing this other thing that now you're
not able to Avail yourself to other
opportunities that are out there you
have the money let's just assume for the
sake of argument you have the money you
just don't have the time and so there
are missed opportunities that we have to
account for so these are four factors
that we need to assess in order to
determine what is happening with our
time how much value is are we
surrendering how much currency how much
time currency are we spending in real
estate and and of course you can apply
this to other things Beyond real estate
but I'm thinking about this mostly of
course from a real estate perspective
and of course through the lens of
Greenville so here's the way I'm
thinking about this I think we need to
judge these four categories put them
on a scale I've actually got a
spreadsheet in front of me and I've got
these these four categories on the left
enjoyment Factor stress factor negative
lifestyle Factor and Miss opportunities
Factor I've got those on the left column
and then I've got three more columns to
the right one column is love SL low and
I'll explain this in a second the other
one is it's work slm mediand the
other one is hate SL High and then
I've got zeros in the love SL low
column T in the its work slm medium
column and 20s in the hate SL High
column all right so here's how this
works basically for things that are
positive for you so if if you really
enjoy what you're doing let's say that
you're flipping a house and you just
love it it energizes you it brings you
so much enjoyment you look forward to it
every aspect of it it is just brings
you life brings you vitality
in essence you're not
spending time currency yeah you're
spending time but it's not you're you're
you're spending your time doing
something that you love so that's a good
use of your time for the sake of of what
we're talking about here we're going to
say that you have spent zero time
dollars because you're getting for your
time something that you love so that
is in the love/ low column you love it
it a Z okay the lower the number the
better that indicates how much you've
spent quote unquote you haven't spent
anything let's say that you on the
enjoyment Factor you're like you know
what it's it's okay it's it's just kind
of like a second job for me all right at
that point we're putting a
10 that is and and I'll explain how
these values get assigned how it works
later but it's a 10 and then if you hate
it all right and you're just like I hate
every aspect of this I do it for
other reasons I do it for the money but
I absolutely hate it from the time I
purchased the house until the time I've
sold it every step along the way I hate
it's a
20 so the
lower the better and the higher the
worse from zero the scale is basically
from 0 to 20 now we've got the stress
factor let's say it brings you you say
it doesn't bring me any stress your
stress is low that would be a zero and
of course if you're if you're doing this
at home if you're pulling out a
spreadsheet and you're creating this
yourself I don't necessarily think it
it has to be 0o 10 and 20 I mean put it
on a scale maybe it's really like a five
it's not no stress but it's also not
like work level stress so you say it's
somewhere in between that it's a five
it's a five okay great put it as a five
it's work level stress that's a 10
it's like super duper stressed causing
you to lose sleep that's a
20 negative lifestyle factor it's
taking you away from from things that
you want to do let's say that it's not
and and that can be from for a variety
of reasons maybe you have outsourced
everything to the point that you
actually don't need to be there at all
you're hardly even
involved you barely even know what's
going on now that that's rare it's it's
rare that you would be completely
unplugged from it but let's just say for
the sake of argument that that's the
case that would be if it's not taking
you away from anything that you want to
do that would be a
zero if it's taking you away from from
things to the extent that work
does again comparing it to to just
having a normal 8 to five job that would
be a 10 and if it's like controlling
your life like you're over there all day
all night for like a long period of time
that would be a 20 all right it would
be high high on that negative lifestyle
Factor scale and then the missed
opportunities Factor
and this one's a little bit harder to
assess you you've just got to be honest
with yourself are you still availing
yourself to opportunities are you still
looking are you still spending the time
to to go look at properties for instance
or to be networking to try to to make
those connections with people that can
help you in that way doing things to try
to to get more financing to try to to
try to raise more Capital all these
things if what you're doing real
estate wise is not taking away at all
from that it's not causing you to miss
any opportunities and that would be a
zero if it's again work level type of
of U of or medilevel is taking you
away it's taking you away from you know
it's maybe giving you 50% capacity let's
just call it that it's giving you 50%
capacity from what you would normally
have if you didn't have a single project
going on that would be a 10 on this
scale and then if it's basically you're
just hunkered down you can't even think
about any other opportunities out there
then it's a 20 on this scale now
here's how this
works
the scale essentially think of it kind
of like a work week if you go through
these four things and and here's what
you can do you can try to extrapolate
let's just say a house flip for instance
you can try to
extrapolate roughly speaking what the
value would be for all of these in a
house flip but you might even break it
down even further to the different parts
of the house flip the acquiring of the
property the doing the work itself
then the marketing the property to sell
and you could find a bunch of other
SE subcategories in there you could
look at how you spend your time on all
of those things to value your time and
to value
how your time is being spent in those
different Pursuits that way you can
approach it from that standpoint but
you can also just take the whole thing
and just try to figure it out as you
know one big enchilada so to speak so
let's say that you plug in all these
different numbers you say enjoyment
Factor I don't really enjoy it it's
kind of like work to me that's a 10 okay
stress you know it brings me a little
bit of stress that's a five all right
now we're up to 15 negative lifestyle
yeah it takes away a little bit from
from my lifestyle not a whole lot it
it's not the equivalent of working a a
you know a full-time job that's another
five now we're at 20 missed
opportunities well maybe you're you're
really having to to hunker down you
can't really focus on more than one
thing at a time we're going to call that
we'll call that a a 15 okay because
you can't really you you will start to
get stressed out if you have other
opportunities that you're having to look
at so that's the
35 the scale is the way the scale works
at least the way I've designed it is
that 40 is straight there in the middle
and this makes common sense if you're at
a 40 that means in essence that your
your time is being spent kind of like
just a second job and so at 35 it's a
little bit less than that okay it's a
little bit more enjoyable than just
working a second job if you get over 40
now you're talking about something
that's you're spending more time
currency than you are at a job you're
spending too much time currency if it's
over a 40 and so you can apply this to
different projects as well you look at a
project and you say you know what this
project I am going going to spend a lot
of time here this is going to be me
spending 40 hours a week here it's
going to be stressful it's going to take
me away from things it's going to
cause me to miss out on
opportunities you need to assign a value
to that now let me say this
okay I'm not saying that just because
something is and maybe I I made it sound
this way before and I apologize if I did
just because something is over a 40
on this scale doesn't mean it's a bad
opportunity you just have to understand
that at that point you're spending a lot
of money in terms of time currency okay
over a 40 you're spending a lot of money
now maybe you're getting back so much
money on your investment that it just
makes sense you know just like working
overtime at work it just makes sense to
get that time and a half or whatever the
case may be I personally I don't want
to get over 40 I want it to be lower
than that and I would actually take
lower margin types of projects in terms
of house flips and whatnot in order to
keep that number below 40 but we just
need to be honest about the time that
we're spending and so you can look at a
project and and determine that and to
determine factor in it's not just about
the money okay if it were just about the
money then this would be a whole lot
simpler but you have to find a way to
assess your time as well and this is one
way that I think we can do that and and
maybe you don't want to plug in a
spreadsheet like I've done just think
about how much you enjoy it how much
stress it brings to your life how much
it's going to cause you to miss out on
things you want to do and how much it's
going to cause you to miss out on other
opportunities and you can kind of do
that math in your head to some extent
now a lot of people if they really
really just love house flipping or
whatever type of real estate project
that they're doing they might be
willing to surrender some of these other
things and maybe for you you can Tinker
with the scale and maybe give more
weight to one thing than another this is
just how I've done it and this is just
to give you an example to start you
thinking about this concept of
valuing your time not just being focused
on all these different rules for how
much money you make in a real estate
transaction but to actually give value
to the time being spent as well because
there is value to that and that needs to
be accounted for now in part two this
was part one of of this time value
type of concept in part two I have an
actual formula that I'm going to give to
you guys and that's going to be next
week we'll talk through an actual
formula that I use that I develop that I
think is going to be helpful helpful in
a way for us to determine whether
whether our time is being used in a good
way the value of it how to how to think
through it and again this is all
subjective because at the end of the day
you may be willing to make time
sacrifices for money sacrifices and
there are different times where that can
make sense but I want us to to Think
Through real estate more holistically
it's not just about money it is also
about our lifestyles I hope that was
helpful for you guys just reminder my
contact information is all in the show
notes please rate review subscribe
download all those things for this
podcast I appreciate you guys I hope to
hear from you soon and I hope you stay
safe
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