Real Estate Investing Basics

The One Real Estate Mistake You Can Never Fix…

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I often perceive things in philosophical terms — how about you?

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I mean, it’s a blessing and a curse, because on one hand this enables me to see colors where someone else sees only grey, but on the other hand, sometimes — too much color!

Well, I can’t help it either way, and this week I saw something in the Forums that made me think. Oy vey…more about that in a minute, but for now:

SEGUE

Last night I had a great experience — I played the Cash Flow board game with an old violin student of mine. It was just the two of us. He beat me rather bad. The kid was buying up houses with zero down and shares at $1 and $5 (my boy), while I was busy procreating (3 times), and getting downsized (twice). I’ll tell you what — it’s a good thing I play much, much better in reality than I did in the game, or I might have had to move my family into my dear friend Brandon Turner’s basement by now…

But back to my student. I’ve known Sam for many years. Sam is a very talented person. He was, for a long time, my star violin pupil. The thing about Sam was that he didn’t come to me until rather late in the game; he was 8 years old when I started teaching him, which is quite old for a violin student.

Related: How Life Coaching has Helped Improve My Business and Life

You see, violin is not only a mental, but a kinesthetic skill which requires a student’s mind and physiology to mold itself in all kinds of ways in order to accommodate the learning of the skill.

Well, the earlier a student begins the process, the more likely that this process will see a successful outcome. Why? Because our minds and our bodies become conditioned — I would even say “jaded” — the longer we experience the world. Both the brain and the muscles lose their elasticity as time goes on, and the bones harden and become too rigid to adapt to anything other than what they are.

Once this process of hardening of mind and body reaches a critical stage, it becomes impossible to learn the skill of violin because both the mind and the physiology stop being sufficiently pliable. This is why we typically start kids on the violin at the age of 4; Sam was 8 when he came to me!

For this reason, the learning process for him was far less natural and far more painful than it should have been, and the only reason he had done as well as he had was because was because he had decided that this was the way it was gonna be! Sam wanted to play the violin, and he was going to work as hard as he needed to.

Related: Don’t Rely on Luck: A Lesson in Real Estate Investment

This seems an appropriate moment to segue back to the post on the forums that I alluded to earlier.  Wendell De Guzman started a discussion titled If You Can Invent a Time Machine – What Will You Tell Your Younger Self so You Won’t Make the BIG Real Estate Mistake.

I thought it was an extremely important question, although I figured Wendell himself had answered it unknowingly. My comment to this was: “start sooner.”

My thinking is — most mistakes can be fixed, so long as there’s time to fix them. And if it’s true that the more BIG mistakes we make, the better we become, then time is the only limiting factor. Truly, the only mistake which cannot be fixed is missed time itself — once it’s gone, it’s gone! And then there is the issue of the hardening of the brain…

CONCLUSION

I am likely much more cognizant of time and its impact on my decision-making process than most people reading this. One reason is that I am a musician and teacher by trade, and time, as I hope to have illustrated, is of the essence. But also, the diagnosis of MS likely has something to do with this…

Time — Loss of Time, to be precise, is the only mistake from which lessons cannot be applied in the future. And thus my comment on Wendell’s thread – if I were to do anything differently, I’d start sooner!

Do you ever contemplate the repercussions of lost time? What would your answer be to Wendell’s question?

Join in on the comments below!

Ben has been investing in multifamily residential real estate for over a decade. An expert in creative financing, he has been a guest on numerous real estate-related podcasts, including the
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    JerryW.
    Replied almost 6 years ago
    Ben, I agree starting sooner is the biggest thing I would change, the other would be to educate myself sooner. I just learned by hard knocks, I did not seek out knowledge. It took me much longer to look at real estate as a game where you need a winning strategy in all areas, not just will it make money. If I had the knowledge 20 years ago I have gained in the last 3 years it would be a very different ball game.
    Ben Leybovich
    Replied almost 6 years ago
    Yes, Jerry – I also have made my share of mistakes and have paid for those. But, as they, so long as we fall forward… Thanks so much for leaving a comment!
    Bram
    Replied almost 6 years ago
    Earlier, sure. But how much earlier? I mean I am a different animal at 38 than I was at 18 or 28. I know there are people that start at 18 and make all the mistakes early making them lean, mean investing machines by the time they are 28. But I would have made a terrible investor at 18. At 28 I was much too invested in my career to even contemplate retirement, to say nothing of early retirement to say nothing of suspecting that my retirement fund was not going to take care of me. I didn’t have the necessary motivation. I have no regrets that it has taken this long to get started. Admittedly I don’t have a time bomb ticking inside of me that I am aware of which would probably change my perspective. In all honesty though, I don’t think I would have been ready earlier. Now if I could start at 18 with all that I know now, that’s a whole different story 🙂
    Ben Leybovich
    Replied almost 6 years ago
    Yours is an insightful comment indeed, Bram. I totally agree with your perspective – it is honest and true for you. For me, things are a bit different… Thank you much for your comment!
    Bram
    Replied almost 6 years ago
    Ben, you play the violin, I play the Tenor sax. I think that explains everything
    Ben Leybovich
    Replied almost 6 years ago
    Oh, brother…
    Jerome Kaidor Investor from Hayward, California
    Replied almost 5 years ago
    So, would you musicians say – that learning music at a very young age is a good thing? Not only for the possibility of becoming an actual musician, but also for success in life as a whole? I have a specific reason for asking this question – actually two specific reasons – my children. Who are 23 months old.
    Wendell de Guzman
    Replied almost 6 years ago
    Nice blog post Ben! Yeah – I wished I started sooner too.
    Ben Leybovich
    Replied almost 6 years ago
    Never too late, but sooner would be nice 🙂 Thanks Wendell!
    Bill Wallace
    Replied almost 6 years ago
    Reminds me of the research from Gladwell regarding practice and mastery. Made me look up a recent article about that – http://healthland.time.com/2013/05/20/10000-hours-may-not-make-a-master-after-all/ Always said my son’s first word after mom & dad was “ball”. Kid wanted to throw a baseball with me all the time. Now holds the high school record for strikeouts in a game. Starting early and practicing all the time does matter.
    Ben Leybovich
    Replied almost 6 years ago
    Well, Bill – I agree and disagree. Talent can be taught – true. However, genius can not. Practice does develop talent, but not genius. Having said this, REI does not require genius, only some talent. This is why hard work pays here 🙂 Thanks so much for reading, Bill!
    Ben Leybovich
    Replied almost 6 years ago
    Well, Bill – I agree and disagree. Talent can be taught – true. However, genius can not. Practice does develop talent, but not genius. Having said this, REI does not require genius, only some talent. This is why hard work pays here 🙂 Thanks so much for reading, Bill!
    Ben Leybovich
    Replied almost 6 years ago
    Well, Bill – I agree and disagree. Talent can be taught – true. However, genius can not. Practice does develop talent, but not genius. Having said this, REI does not require genius, only some talent. This is why hard work pays here 🙂 Thanks so much for reading, Bill! Reply Report comment
    Bill Wallace
    Replied almost 6 years ago
    Reminds me of the research from Gladwell regarding practice and mastery. Made me look up a recent article about that – http://healthland.time.com/2013/05/20/10000-hours-may-not-make-a-master-after-all/ Always said my son’s first word after mom & dad was “ball”. Kid wanted to throw a baseball with me all the time. Now holds the high school record for strikeouts in a game. Starting early and practicing all the time does matter.
    Gene Cook
    Replied almost 6 years ago
    I agree that time is one of the things we have no control over once it is . I fantasized about real estate investing for years before taking the plunge. I had many of the needed skills but never got off the bench. Finally got involved with a friend who did not necessarily have any more skills and knowledge (probably less) but had the courage to jump in. My take away is that sometimes we have to use resources outside of ourselves to make what we want to happen happen.
    Ben Leybovich
    Replied almost 6 years ago
    I completely agree that external forces are often the catalyst behind our action and ultimately, our success. Whatever works! Thanks so much, Gene!
    Ben P.
    Replied almost 6 years ago
    Ben, Thanks so much for sharing something so personal with us. As with most things in life the value is wasted on the youth. We, in general, only focus on having fun or a “real job” when we are young. Unfortunately I would have loved to get into real estate as a kid but lost that chance. I’d even read Rich Dad Poor Dad at 16. My problem was that I still was a kid and allowed my bad choices in life to put up some major road blocks to achieving my goals. I’m 37 now. Just finished real estate school last week and I’m looking for my first house to flip as we speak. I’m also new to BP and love all the content. Thanks to you Ben and to all who have shared their stories, experience and knowledge here.
    Ben Leybovich
    Replied almost 6 years ago
    Fall forward – right, Ben?
    Ben P.
    Replied almost 6 years ago
    You got it sir!! Fall forward or as an old mentor taught me, “fail forward” meaning if you aren’t going to accomplish the goal or completely fail while attempting it, at least learn from it so that you can avoid mistakes and grow as an investor or even better, as a person.
    Ben Leybovich
    Replied almost 6 years ago
    “Sir” – ?! Well – I feel old now…
    Ben P.
    Replied almost 6 years ago
    On that note I’d tell anyone out there still young enough to not know any better that the choices we make now can, and will, effect us much longer down the road than we think they will. Make the right choices now so that you can live with those choices later. Whether it’s a financial decision or a real estate decision or any other decision that could possibly effect you long term. Choose to live a positive, healthy life. Anger, hatred, depression and other negative emotions will only cloud your judgement and guarantee poor decision making.
    Ben Leybovich
    Replied almost 6 years ago
    With you brother!
    Rachael
    Replied almost 6 years ago
    Good Morning Ben, This is an excellent topic! I have heard you on BP quite a bit and appreciate your RE views and information. I truly agree with you, lost time can be replaced by nothing else, particularly in regards to how we form; physically, mentally, and emotionally. In Bram’s comment above, I understand that sometimes you aren’t ready. This can be due to a myriad of things in life, but you can set the stage in other ways to lead yourself (or others – ie: your children) toward being able to see more clearly the path to take. Since deciding to leap into educating myself on REI six months ago, I have pulled my children along with me insofar as teaching them the basic ideas of money and business (Cashflow 101 and tools of that nature are very helpful). At 13 & 17 they are being given the building blocks to help them understand how to create a prosperous life of choices that doesn’t rely on luck. Their minds will intuitively see opportunity and the positive, intelligent way to function to get started as early as possible for themselves, whatever they choose to do. My true goal for them, is choice. I want them to be able to choose where their lives will go based on what they want, rather than have to follow a path of necessity based on what they don’t want. Unfortunately, I still feel that I am starting them later than I would like, but I have just done so myself and I am certainly no longer in my teens! Better late than never. Thanks again for this post, it reminds me that my goal for myself and my children is worthy and keeps me motivated.
    Ben Leybovich
    Replied almost 6 years ago
    Rachel – I have one thing to say: Teach your kids! And since the best way to do it is by example… 🙂
    Jerry Kaidor
    Replied almost 6 years ago
    It’s never too late. I didn’t start messing with RE till I was in my 40’s. When I was about to graduate high school, I decided I really wanted to learn Russian…. ( why on earth? Darned if I know ) Did it, too. Shouldn’t have been able to. Now I’m 60 years old. Dug my daddy’s mandolin out of the closet, and am learning to play it. Shouldn’t be able to do that either. We’ll see. Of course, it’s probably an order of magnitude easier than the violin. 🙂 Never too late, as long as you’re breathing…and have all your marbles.
    Ben Leybovich
    Replied almost 6 years ago
    Haha – having all my marbles past 50 is of rather serious concern to me 🙂 Thanks so much, Jerry!
    Tammy
    Replied almost 6 years ago
    I definitely regret not starting sooner. I’ve been wanting to invest in real estate since I was about 20. I am now 50. I’ve flipped one property ( in the pass 20 years) and have 2 that I am working on right now. I always had an excuse to hold off being more aggressive. Before I realized it I turned 50 and finally realized that I was not getting any younger. That is why I am only focusing on real estate now. I realize that it will be slow going for now but each day I get up with a plan and I work that plan. The more I get involved with real estate the more I am determine to be successful. On another note I came across a study somewhere that stated that a lot of successful people don’t reach there potential until after they turn 50. I take comfort in that. I also try to remind myself that even though I was not aggressive with real estate I have definitely learned a lot of the skills that I believe that you need to be successful in the area of real estate.
    Ben Leybovich
    Replied almost 6 years ago
    Hello, Tammy! Nothing is ever too late! However, intellectual worth is a matter of images we see in the rear view mirror. It takes time to accumulate those images, which is why I believe the results of the study you mention – it may very well take long after 50 before we achieve our ceiling… All best to you!
    Tammy
    Replied almost 6 years ago
    Thanks Ben!
    Brett
    Replied almost 6 years ago
    God is life. God is life in action. The best way to say, “I love you, God,” is to live your life doing your best. The best way to say, “Thank you, God,” is by letting go of the past and living in the present moment, right here and now. Whatever life takes away from you, let it go. When you surrender and let go of the past, you allow yourself to be fully alive in the moment. Letting go of the past means you can enjoy the dream that is happening right now.” ? Miguel Ruiz, The Four Agreements
    Brett
    Replied almost 6 years ago
    God is life. God is life in action. The best way to say, “I love you, God,” is to live your life doing your best. The best way to say, “Thank you, God,” is by letting go of the past and living in the present moment, right here and now. Whatever life takes away from you, let it go. When you surrender and let go of the past, you allow yourself to be fully alive in the moment. Letting go of the past means you can enjoy the dream that is happening right now.” ? Miguel Ruiz, The Four Agreements
    Ben Leybovich
    Replied almost 6 years ago
    Hey, Brett! I think that that all future is simply well-forgotten past. Letting go of the past is a mistake – However, being in the moment is not the same as letting go of the past, if that’s what you meant 🙂 Respectfully – Ben Leybovich
    Keith Weinhold
    Replied almost 6 years ago
    As a 12-year real estate investor, sometimes I am asked what I would do differently: 1) Bought sooner – time value of leverage. 2) Bought more – a greater total amount to leverage. 3) Stopped self-managing sooner – I’ll never get that time back. Most people have a better and higher use. Life is too short to manage properties and tenants.
    Ben Leybovich
    Replied almost 6 years ago
    Hah – all valid points 🙂 Thanks n=indeed for reading, Keith!
    Ben P.
    Replied almost 6 years ago
    Thanks to all who shared their perspectives here. I’m glad this website isn’t just about buying houses and making money, although that’s why we’re here. I know that life as we see it, our perspective effects the choices we make. We CAN look back on life and learn but we shouldn’t allow passed mistakes to slow us down or define us. I’m glad for that reality because I’d be a failure for life and never be successful as an investor if that was the case. I’m ready to move forward, learn from the life I’ve had so far and make the life I have now, and in the future, the best and most successful that it can be.
    DJO
    Replied almost 6 years ago
    Hard to say. I would have loved to be able to purchase property sooner, but my timing was good, and the property I acquired was an excellent, solid choice (could get burned down, run into by a truck, have a meteorite strike it or whatever, but that doesn’t affect the fact that it is a solid value property). I did seriously consider purchasing a certain property 20 years ago, but lack of $, location of property and concerns about water kept me from buying it. In retrospect, if I had purchased the property it would have been harder for me to pursue my current career which I started at exactly that time (and which I love…90% of the time!), but it would also likely be paid for, and even after the bust it’s worth @ 10x it’s 1994 purchase price. Sort of a wash. Happy where I am, would like to (or manage) more property. Would like to keep property that is currently in the family, but will have to figure out how.
    Ben Leybovich
    Replied almost 6 years ago
    Hey, there – DJO! I interpret your comment as though buying property is buying a property – 1 piece of property. Sure, if that is the ultimate goal, to simply buy 1 piece of real property, timing is sort of a non-issue. What this article is about, is building a business in RE – very different kind of thing from buying 1 property here, and perhaps another one there. And time is much more of the essence… Perhaps I read you wrong…?
    Dave Tanner
    Replied almost 6 years ago
    As your BFF Brandon once said…. “A year from now you’ll wish you started a year ago”.
    Ben Leybovich
    Replied almost 6 years ago
    Haha – my BFF…Touche You know, Dave, I’ll be seeing my BFF in 10 days or so 🙂 Me Happy!!!
    Jessie
    Replied almost 6 years ago
    I read a quote that says the most unfortunate thing that happens to a person who fears failure in life is that he limits himself by never trying. Ten percent effort trumps one hundred percent procrastination. As a minister also I have never seen a Loomis truck behind a casket headed to the grave yard but I have seen family and friends that have had to pick up the funeral tab. Real estate can make a significant difference in your quality of life and others.
    La Nae Duchesneau
    Replied almost 6 years ago
    Well yes, I would start investing in real estate sooner. However, we couldn’t have known that then. Life makes us who we are. The lessons we learn along the way, mold our thinking and the way we perceive the world. We were busy back then, getting married, getting divorced, having kids, getting a new job, climbing the corporate ladder. We all do the best we can in our given circumstances. So if we could do it over, I think, more than likely, we’d do it the same darn way we did. Life is not about looking back, but looking towards the future. Tomorrow is the first day of the rest of our lives.
    Ben Leybovich
    Replied almost 6 years ago
    Haha – tou-che! Thanks so much for your thoughts, La Nae.
    Joakim Esaiasson Wholesaler from Traverse city, Michigan
    Replied over 5 years ago
    Ben i keep reading you posts over and over agian.. good stuff!!
    Account Closed Specialist from San Antonio, TX
    Replied over 5 years ago
    Ben, nice post. In my situation I wouldn’t of been able to pursue RE any sooner because I was very active traveling in faith based work and probably couldn’t of done either justice at the same time. in 2005 I started buying RE and today have 15 properties I’m getting paid on and it is a blessing unless someone doesn’t pay. Having a foundation greater than money has helped me to be a better person. ( That’s worth a lot in my book.)
    Don Alberts from Frankfort, Illinois
    Replied almost 5 years ago
    Ben, I learn from you and i appreciate it. I wish i would have started sooner, but the Blessing i have is being able to learn from You and others to facilitate my growth quickly. Have a Great Day. Don