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Four Reasons Why You Should Consider NOT Investing in Real Estate in 2014

by Tom Sylvester on January 13, 2014 · 11 comments

  
Time Off To Reinvigorate

Real estate investing is exciting.  

Anyone who invests in real estate has undoubtedly experienced the ups, downs and loop-to-loop roller coaster off emotions that comes with it.

The Ups

  • You just negotiated a great deal that will provide you with a nice monthly cashflow.
  • Or you sold your latest flip and received the check at closing made out to you.
  • Or you helped a seller finally sell their home after it sat on the market for a while with no offers.

The Downs & Roller Coaster

The Benefits of Time Away

It is easy to get caught up in your business, especially when you are working in it for a long time.  As the saying goes, sometimes you need to step away from looking at the trees to see the forest.  Michael Gerber also describes how business owners should focus on their business, not in their business.

About this time last year, we made the decision to take 2013 off and did not purchase any property.  I wasn’t sure at first if this was a good idea.  We would basically lose a year of new cashflow and add an extra year onto our eventual mortgage payment, but in hindsight I am so glad that we took time off.

  • 1. A Long Needed Break

Prior to last year, we were investing continuously for several years.  This allowed us to build up our portfolio, but also meant that we did not have a lot of free time.  Since I work a full time job I work on my real estate business on nights and weekends.  So there was always work to do, whether it was looking for or acquiring the next property, oversee the renovations or work to turnover and fill vacant units.  This meant sacrificing some nights with friends or weekends with the family.  Without actively working last year, I had a lot more time to spend with friends and family as we just had to manage maintenance, not new acquisitions.

  • 2. A Chance to Do Maintenance

We walk through our properties twice a year to inspect and make a list of maintenance needed now or at some point in the future.  Because we were not acquiring new property, it was easier to schedule and get some of this maintenance work done.

  • 3. A Chance to Refocus

Sometimes when you are so close to something, you focus on the tactical aspects of your business but don’t focus as much on the big picture strategic direction.  Over the last year I’ve been able to learn a lot as well as meet with a lot of new people.  I’ve been able to coach several new and existing investors and see what others are doing.  This also allowed me time to review our business and make adjustments.  We were able to discuss and add a new strategy to our investing and are now full speed ahead in this new year.

  • 4. You Get Your Passion Back

Along similar lines, we all can experience burnout when we focus so much on something.  When I started in real estate, I was so excited for each new deal and each new projects.  My daughter was born 2 years ago and during her first year, I felt like I was not around as much as I should have been.  This started to change how I looked at real estate investing as it was pulling me away from my precious family time.  By taking time off, I was not only able to have more family time, but I was also able to add new systems to our business.  These new systems allowed our business to focus smoother and without as much involvement, providing more time for family and allowing me to get excited about real estate investing again.

Conclusion

I love real estate investing.  It is such a great opportunity to not only build wealth, but to help others and the community.  I decided to take a year off from my investing and it not only allowed me to have some personal time, but it also allowed me to make several improvements to our business that will allow even more success in 2014.

Have you ever taken a hiatus from your business?  How have you avoided burnout and kept motivated with your real estate investing?
Photo Credit: WanderingtheWorld

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{ 11 comments… read them below or add one }

Dawn Anastasi January 13, 2014 at 1:50 pm

You forgot the most important reason – convince everyone else to take a break so while they are on that break, you can swoop in and grab all the great deals! :) Just kidding!

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Tom Sylvester January 14, 2014 at 4:21 pm

Can’t believe I forgot the most important one!

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Jason Merchey January 13, 2014 at 3:39 pm

I dig this blog. Fresh content sir!

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Tom Sylvester January 14, 2014 at 4:21 pm

Thanks Jason!

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Wrenn Lee Green Sr. January 13, 2014 at 5:20 pm

Investing for retirement has been my goal with the purchase of real property. My issue with the investment is the real property I bought and still purchasing is very old mobile homes. 1966 to 1970′s and most have been beat up and are almost no value. The dirt they are on is the key to this mans investment. The in-ability to rent them is the true aggravation to my investing. Lack of income makes life hard. I think I will have them all taken down and have the biggest nice yards in the neighborhood. This way people will not say, Do you have a place to rent?

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Martin Cortez January 14, 2014 at 1:55 pm

Tom,
I am currently on hiatus from full time real estate investing, due partly to the downturn in the real estate and secondary note market, but primarily from my own hubris.

These last 4 years have been challenging, but I believe I will be a much better investor, business partner and person because I have been humbled by my fall from (real estate) grace. I am currently working to put myself in a position to invest again, only this time with an attitude of utmost gratitude. I am SO thankful for the time away.

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Tom Sylvester January 14, 2014 at 4:24 pm

Martin – That is awesome and thanks for sharing. I would imagine just about everyone on this site has failed and/or gone through hardship. The key is that persistence and learning from the past mistakes. It is awesome to hear that you are not going to let the past struggles get the best of you and that you took the hiatus to learn.

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Martin Cortez January 15, 2014 at 8:18 am

Tom – thanks for your words of encouragement.

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Brian Gibbons January 14, 2014 at 3:41 pm

Staying fresh is important, and investing in a rising market is more fun!

Now if Dodd Frank does not kill funding!

Nice article, Tom!

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Tom Sylvester January 14, 2014 at 4:25 pm

Brian – Agreed!

And every challenge presents an opportunity, we all just had to look hard and think creatively to find it.

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Shaun January 19, 2014 at 2:41 pm

I’m glad that you were able to refocus and make changes that will help your business moving forward.
I have to disagree with deciding not to buy anything for a year.
As real estate investors we always should be on the hunt for deals, unless you have decided to just run with what you have and are “retiring”.

Now you don’t have to be aggressive about it, but I’d always be looking.

If I were in your position I would probably would have farmed out those maintenance walk throughs and other management activities. I’ll guess you still took calls, coordinated repairs, filled vacancies and all the other management stuff.
Managing properties is a job you perform to reduce costs. Finding great deals increases your income and builds wealth.
I’d farm out the former to concentrate on the later.

BTW this was meant to be a devil’s advocate thing.
Looking at this it looks more critical and jerky than intended. :)

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