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Like Finding Treasure Every Day: A Real Estate Investing Story

by Erion Shehaj on January 23, 2013 · 11 comments

  
Albania

When I came to this country right before the turn of the century, I had no idea my path would lead to real estate investing. In fact, I had no idea what “real estate” or “investing” meant. I was born and brought up in Albania – a rugged country in southern Europe on the Mediterranean and home to one of the most ruthless communist regimes anywhere. If you want to know what it was like, just watch any documentary about North Korea and you’ll have a close enough picture. No private property, no religion, no notion of freedom or free speech.

I was ten years old when the winds of change blowing south from the Berlin wall took down the regime in violent revolts. Eight years later I found myself in Texas studying accounting and finance and getting a first glimpse at the world’s greatest economy at work. After college I started working for a small real estate firm in Houston handling mostly commercial and investment real estate. And I don’t know why or how but I just felt like a fish in water – I had found my calling.

Ten Years Later

Fast forward ten years later – With the proverbial ten thousand hours under my belt and standing on the shoulders of giants, I find myself devising real estate investing strategies for people to help them retire using real estate investments.

Go along with me on a comparison, if you will. On the one hand, as a vital part of the investing process, prospective investors ask me skeptical questions about risks involved that could derail the performance of their investing portfolio. There’s a natural hesitation there that wants to make sure this first important step is placed firmly on secure ground. My business thrives on the basis of answering those questions and in the process, dissipating that hesitation.

On the other, my friends living and working throughout Europe (Italy, France, UK) read my writings on real estate investing and sigh. These real estate investing strategies just aren’t possible where they live. The lethal combination of sky high prices and low rents ensure thousands in negative cash flow every single year. And that’s not even considering economies in recession and sky high unemployment.

Investing in Real Estate in Europe vs. the United States

Take a look at the map visualization of price to rent ratios all over the world. Madrid 26.99, Milan 22.86, Berlin 16.91. Even, Moscow 23.3, Liverpool 11.96 and Guadalajara 16.91. Then look at the house price to income ratios, too. Quick, what do the back of the napkin cashflow numbers look like for a property with a price over 20 times rent? Not pretty, that’s for sure.

During a phone call last year, an engineer friend of mine living in Italy put it best: “What you guys are able to do with rental property in the US is amazing! It’s like finding treasure every day you wake up.”

That really puts things in perspective for investors in the US, doesn’t it?

So what’s the moral of the story, kids? Skepticism is fine – even prudent in some cases. But if you live in the US and have the means to invest in real estate but choose not to out of fear or low tolerance for inconvenience, that’s like finding treasure every day but turning it down because the gold is too dusty.

Do you agree? Let me know in the comments!

Photo: wrightrkuk

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{ 11 comments… read them below or add one }

jeffrey gordon January 23, 2013 at 11:03 am

Erion,

Thank you, your perspective as a relative newcomer to America reminds me and I suspect many others how much we take for granted about the opportunities available to everyone in this country that can, in a generation at most provide tremendous treasure to anyone willing to work for it!

those links are so powerful.

great article!

jeffrey gordon

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Erion Shehaj January 23, 2013 at 1:25 pm

Thanks Jeffrey. That’s the wonderful thing about perspective – it allows us to reassess our reality and choose action over fear or doubt. About the links: A picture IS worth a thousand words, isn’t it?

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Jeff Brown January 23, 2013 at 11:21 am

Welcome, Erion!

BiggerPockets readers — Take it from me, Erion is the real deal. Put him on your ‘must read’ list.

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Erion Shehaj January 23, 2013 at 1:25 pm

Thanks Jeff. I’m humbled.

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Brandon Turner January 23, 2013 at 1:52 pm

Great article Erion! I’m excited to be working with you on the blog here. You bring a great perspective and unique story to the equation! Thanks for being a part of what we are doing here!

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Erion Shehaj January 23, 2013 at 3:56 pm

Much Appreciated, Sir. I am happy to be a small part of BP community

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Jose Gonzalez January 23, 2013 at 2:03 pm

Erion,
Great post and I agree since in my country we are between 0.3 and 0.6 Rent to Cost Ratios. Actually I am currently investing in Texas… Houston precisely. Are you here? I would like to get together and share investment numbers to see what you are looking for and if its the same as me… Please contact!

Jose

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Erion Shehaj January 23, 2013 at 3:57 pm

Thanks Jose. Yes, Houston is my stomping ground and I would love to get together. My cell is 713-922-2702. Give me a call and lets grab a cup of coffee.

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Karen Rittenhouse January 23, 2013 at 2:09 pm

Erion: I like to point out that, in real estate investing, the deal of the century comes along every day!

I, too, think EVERYONE should invest in real estate and, if they don’t, they’re CRAZY!

Thank you for your inspiring post and thank you for contributing to the greatest economy in the world!

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Erion Shehaj January 23, 2013 at 3:58 pm

We have nothing to fear but fear itself. Thanks for the kind words!

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James Schiller January 24, 2013 at 11:56 am

I definitely agree.. I am seeing homes do within hours of being listed on the market, and a home inspect recently told me that over half of the homes they are inspecting are for investor purchases. There is tremendous upside to the U.S. real estate market if you have the cash to buy it and sit on it. Great post!

James

Reply

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