A Good Real Estate Investor Needs to Wear Many Hats

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I still vaguely remember the time when I struggled with chopping garlic, ripping lobsters apart, and asking my father, “Argh, dad, why do I have to learn how to cook?”

He placed his hand on my shoulder and said, in a fatherly authoritative way, “Son, when you get older, you’d realize that women won’t be cooking for you and you have to do that yourself.” And sadly, with respect to my family, that has been the case for the past two generations.

As a grown man who now knows his way around the kitchen, I can’t help but to think this lesson can be applied to real estate as well.

When I first got into real estate, I had hoped I could rely on a team of real estate agents, contractors, property managers and so on to build the real estate business quickly. After all, they are the professionals and you are just starting. You can leverage their strengths and make everything work.

Relying on Others Isn’t Always Reliable

Of course, that wasn’t the case. During my first purchase, I relied on a property manager to rent my property out. The property was in a great location and the rental price was reasonable. However, one month passed, and by the second month, I slowly realized the property manager did not care for my property and listed it on the MLS website with old pictures. Furthermore, I let the same company’s contractors to put the finishing touches on the rehab. As a result, I paid too much for the work and I had let the property sit on the market for too long.

After that I searched for another real estate agent with better contracting experience. And once again, I relied on him for a rehab and realized the team he put in together was not good and we came too much over the budget to flip the property. Ultimately, I found someone else to finish the work and the property was turned into a rental. Nevertheless, it was an extremely frustrating experience.

The Turning Point

But the third time was a charm. I finally decided to grit my teeth and learn everything about rehabbing. I worked alongside a handyman for my third attempt. I watched everything he did and had him explain to me many aspects of fixing things around the house.  I even tried to put up a ceiling fan by myself. Despite the frequent electrocutions, I was starting to get better in understanding different aspects of rehabbing and, more importantly, became familiar with what materials cost.

I started renting houses myself. I experimented with Craigslist and signs and met prospective tenants myself. I knew I wasn’t the best at it. But I was involved with the process. I had control. I was able to make the call and hold myself accountable. It allowed me to review my mistakes and continually improve. It was a long, arduous process, yet ultimately rewarding. By dealing with prospective tenants and tenants myself constantly, I was slowly becoming a better property manager. I wouldn’t say I am all that great, but at least now I can set it up so I can be away for weeks at a time and yet still keep everything running in place.

Learning to Buy

I worked on my buying as well. I used to just rely on my agent to bring me what are considered deals. Then I started scouring MLS myself and constantly visit properties, whether they smelled horrific or looked like they would collapse at any moment. I learned so much that I can now quickly assess a property and know if it is a good deal. Furthermore, I started learning about finding private sellers, buying houses from them, and negotiating on having them finance your purchase. I was able to build my business at a much faster pace once I began working off the MLS. Even as the real estate inventory began to shrink, I was able to accumulate a decent number of properties last year.

Learn to Wear Many Hats

I would’ve never been able to improve my real estate business had I just relied on “experts.” I had to dive in and figure out everything myself. Otherwise, how would you know if you had been lied to? I may not be a great property manager, rehabber, or buyer, but at least once I tried all these areas myself I’ve learned about what mistakes to look for and what I can improve upon. Having knowledge in all areas of real estate is crucial to your success. You do not have to be perfect in each area, but being a generalist serves a much greater purpose than being a specialist. And you have to get involved with every aspect of the business, no matter how small or how big, at some point, in order to effectively operate your real estate business. If your handyman happens to be sick, you can fix that leaking toilet. If that tenant decides to cause a ruckus, you know how to properly deal with them. And so on. Once you have it all figured out, then you can start outsourcing all your work to others. Now you will know what needs to be done, how much time, at what cost, and etc.

So even if you haven’t built the greatest real estate team yet, you can still commandeer the business in a good direction. Just like my life now, even if I have trouble finding someone who could whip up an amazing meal for me day in and day out, thanks to my father, at least now I know I can cook a semi decent meal for myself.

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About Author

Leon Yang is an active real estate investor in Las Vegas. He is a buy and hold guy who also likes to flip from time to time. His main passion is to traveling to the less traveled places and inspiring others to become financially independent through real estate.

8 Comments

  1. Thanks for the article. I’ve been weighing the option hiring a real estate agent list my SFR on the MLS or rent it out myself. I also mainly use Craigslist, postlets, and sign in the front yard. The quality of potential tenants are not very good on craigslist and I have to filter through many applicants.

    I hear listing on the MLS may get me opportunities for higher qualified tenants. Possibly can rent for a highe Mount. Potential con is it may take longer to rent as you stated.

    My home is in the Phoenix area. Would like to get your opinion on you experience if you’ve used the MLS. Also if Nyone else would like to chime in, it would be appreciated.

    • Leon Yang

      Thanks Thai! I think you can do both and see what kind of tenants you get. I think it is better coming into it thinking that you’d have to give up some commission one way or another, but the key is to expand your horizon and see what kind of tenant you can catch.

  2. Leon,
    This is the way we done things. If you have never at least tried to learn an aspect of your business, then you will not be able to recognize when someone else is doing it well for you. I do believe that eventually there are some “hats” you want to give to someone else! Thanks for the article!

  3. Sharon Vornholt

    I loved this post Leon. It’s funny how our “previous” life before real estate and those experiences have such a profound effect on our current real estate business.

    Even after you have built your team, you definitely need to be the one stearing the ship.

    Sharon

  4. Good article.
    Everyone really should know the basics of all the aspects of the business. You don’t have to be an expert but need to have a grasp of the fundamentals to be able to talk intelligently to a subject and know if you are being BSed.
    To be successful long term I fully believe you need to delegate most of these things, but many people confuse this with ABDICATION.
    You don’t have to swing the hammer but you need to know who is, how much they cost, when they should finish, changes that come up, regular progress checkups, and good constant communication, etc.
    To many newbies think you can “set it and forget it”. Doesn’t work that way. You can reign in things somewhat as you get more experience and a trusted team but you always need good communication and regular updates and involvement in big decisions.

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