7 Life-Changing Lessons I Wish I Knew as a Real Estate Newbie

by | BiggerPockets.com

As can be expected in real estate, I’m often approached by people who see me as a “real estate guy” (sounds better than “slumlord,” which cops love to call me — I own nothing in the slums, promise). I’m often asked about how I did it, how I do it, what I’m going to do next, etc.

I’ve come to learn that while every so often someone will actually be interested in my story, the overwhelming amount of people really want to know how they can do it. They want to know the secret. The foolproof way to make lots of money. It’s interesting to hear about how a blue collar worker was able to get into real estate investing without a background in it.

Many people are curious about real estate investing. Some hear the late night infomercials. Some watch too much HGTV. Some know an old man who’s worth millions from buying rental properties. While the curiosity comes from many places, one thing is almost always certain — people want to know how they can do what I did. They seek the comfort that comes from hearing another share their story.


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Overwhelmed? You’re Not Alone

I remember when I was new. EVERYTHING felt scary. Man, it was overwhelming, paralyzing even, to think about all the things I didn’t know. On top of that, I was constantly being told “be careful,” “it’s not for everyone,” “don’t get greedy,” and other ambition killing comments. When you combined my inherent fear from what I didn’t know with the external fear of those giving me “advice,” it is very easy to see why I started slowly.

I missed out on hundreds of thousands of dollars by not moving on deals that were no-brainers by just about any investing standard.

Now, that was an unprecedented time in recent U.S. history. We aren’t likely to see a perfect storm like that again anytime soon. But if I could go back, I would absolutely gobble up everything I could get my hands on in great neighborhoods with incredible schools, close proximity to freeways, very low crime rates, and access to parks and commercial shopping. I had plenty of disposable income.

Not to mention, everything cash flowed very healthily.

Why didn’t I buy more? I was scared. Paralyzed. It’s embarrassing to admit now, but I actually felt like I was the only one doing this. That no individual person had actually tried to buy a bunch of rentals and make money from renting them out. I didn’t understand vacancy. I didn’t understand property management. I didn’t understand repairs. I didn’t understand economic cycles. I was just a deputy sheriff with a degree in Psychology and Criminal Justice.

I was alone, isolated, and unnecessarily fearful.

I didn’t have BiggerPockets as a source of support and confirmation. I didn’t have — nor did I know I should have — a mentor. I didn’t know books were written on this. I didn’t know how to check market rents. I actually thought if the tenant notified me something was broken, it was somehow a reflection of my failure as a landlord — that repairs being needed were an indication I had screwed up with my rehab.

Not gonna lie. I really sucked at investing.


Sucking a Little Bit Less

But guess what? I’ve come a long way since then. I don’t suck as badly anymore! I actually think I suck much, much less. I now make enough to cover 100% of my living expenses. I have a net worth that allows me to invest in SEC-accredited investment opportunities. Luckily, I’ve yet to lose money on a real estate deal. I have a website (very fancy). I have a “portfolio” of real estate investments (also very fancy). Soon, I’ll be writing my own book (uber-fancy). I’ve been on podcasts, spoken at conferences, joined elite masterminds, and rubbed elbows with some pretty successful investors. And you know what I’ve learned?

I don’t quite suck as much as when I started.

See, you could write books on what I don’t understand about real estate investing. There is So. Much. To. It. God, I can’t even begin to explain how much there is to it. There are so many different strategies for how to pick an area to invest in. So many different schools of thought on how to maximize returns and minimize risk. So many rules of thumb to learn and memorize. So many acronyms! Oh my word, it’s an alphabet soup of ROI, IRR, ARV, FSBO, IRA, JV, LTV, NNN, REIA, SFR, PITI, MLS, HUD, HOA, and BRRRR!

Related: 3 Underlying Issues That Keep Newbies From Investing Success (& How to Conquer Them)

There are also strategies for how not to overextend, how not to hold back, how much to keep in reserves, when to use partners, when to use wholesalers, when to use turnkey, when to self manage, and when to 1031 into larger properties.

I could go on and on and on. But I’ll spare you.

The point I’m trying to make is that although I’ve achieved a measure of success by most people’s standards, I still know very little when compared to how much there is to know. I learn literally every single day, and sometimes I’m embarrassed that I didn’t realize some things sooner.

If other investors are honest, they’ll tell you the same thing.

Now, if there can be SO MUCH that I don’t know and if I’ve still experienced “success,” why would you think that you can’t?

Common Misconceptions

I’ll tell you what I think. I think that many of you believe you need to know much more than you really need to in order to get started. I think you’ve read the success stories of people who have done great, realized you can’t do what they did, and counted yourself out. But there is a lot you don’t know about them.

You don’t know they have contacts you don’t that sped up their learning curve or access to deals.

You don’t know they started out with a huge trust of money someone left them.

You don’t know all these “deals” they are putting together are actually joint ventures with other investors where they are putting zero money in the deal, have zero risk or liability, and are possibly just gambling that thing works out — with no clue if they’re going to or not.

You don’t know a lot of them are posers. You also don’t know what advantages they had that you didn’t.

If you did know, you would probably feel much, much more confident about your own odds.

Now, in a personal display of transparency, I’m going to share some examples of things I did not know when I got started investing that I now wish I had. Things that would have sped up my learning curve, increased my confidence, and increased my exposure to people who would have benefited my budding RE investing career.

I truly believe RE is the “poor man’s” way to build wealth. It’s the “everyman’s” opportunity to take control of his or her future. It bothers me to see hedge funds, large corporations, and people who are already insanely wealthy buying all the rental property. It also bothers me to see people wasting precious time getting started. Time they can’t get back.

I want to help you get started. I hope I can. Without further ado, here is a list of things I wish someone had told me when I got started.


7 Life-Changing Lessons I Wish I’d Known as a Real Estate Newbie

1. You don’t need the perfect mentality — or the perfect deal.

Remember that school term paper you knew you needed to write but you kept putting off because you wanted to make sure you wrote something amazing and weren’t quite ready?

That paper never got written until the last minute.

Perfection leads to procrastination. Sometimes it’s better to just get it done than to present a flawless product. Sometimes trying to be perfect just ensures you’ll do nothing.

Real estate investing can be this way, too. I remember being embarrassed to tell others what I paid for a house, thinking they would judge me. I remember having no idea what a fair price for a house was, so I would just offer significantly under asking price because I mistakenly believed that meant I got a “good deal.” I remember not knowing what a “good” ROI was. I also remember holding out for two months and missing out on $3,000 in rent to get an extra $50 a month because I thought it made my investment appear stronger to others when I shared my numbers.

Pretty foolish in hindsight.

My pursuit of perfection, handled incorrectly, caused me to stand on the sidelines instead of playing because I wasn’t in Olympic shape yet. I didn’t understand that actually playing the game is what gets you in shape! Had I understood that on my first few deals — the real value is in learning, not earning — I would have shortened my learning curve considerably.

My point? You don’t need home runs to win games. Base hits win games. Walks, sacrifice flies, stolen bases, and bunts can win you games.

Heck, even a great at-bat where you don’t reach base but learn about the pitcher can help you for next time, right? Chasing after a deal and learning what motivates sellers, how to negotiate, how to improve the terms of your offer, and how to analyze deals more quickly can have significant impact on boosting your investment career, even if you don’t get the deal. The reality is, most of the value of your first deal is in what you learned, not what you earned.

Related: For Newbies: The Motivation You Need to Take Off the Training Wheels (& Start Down the Road to Investing Success!)

Focus on acquiring good, solid, cash flowing properties in good neighborhoods and school districts at below market value. If you round up enough of these, you’ll find yourself much wealthier, much sooner than you thought.

2. Don’t ever undervalue the importance of relationships.

When I was new, I was a little obnoxious jerk.

I was penny wise and pound foolish. I scrimped and saved on small costs at the expense of hurting the people who could bring me future deals. I actually asked my agent to give up part of her commission sometimes when she was already getting me a screaming deal (and had given up some of her commission to get me a better price). I cringe at these thoughts now. My word, was I ever stupid. I just didn’t know any better.

Here’s a fact many of you don’t know yet. People, not your own brilliance, are going to be what bring you the majority of your deals. Especially when you’re new.

We all love to talk about strategy because it makes us feel in control of the whole thing. We control our own destiny through our hard work and ingenuity. I’ve been there, too. I thought that’s what it took. Know what I’ve learned? It’s 10 times easier when someone just calls me and says, “Hey David, looking to flip a house right now? I’ve got one you’ll like.”

Sometimes it’s really that easy.

If people like you, they will want to help you. If people know how they can help you, they will. Sure, you can hide in the basement for three months and develop a super-secret algorithm, develop it into a program, and unleash it upon the world to help you locate distressed properties, OR…

You can make people like you and make sure they know that you’re looking to buy good deals.

I, to my shame, did not focus enough on making people like me. I was selfish and short-sighted. God only knows how many deals I missed out on because people brought them to someone else. UGH!

Don’t be that way. Make it a priority to help others. Make sure they get paid. Make sure they get referrals. Make sure they are appreciated. If you do, more often than not, the deals will find you.


3. It’s probably less scary than you think.

This one’s big. Many people don’t get started because they don’t know what to expect. All they can think about is what they stand to lose. While it’s very important to measure risk (very, very important), one of the risks people fail to measure is what you stand to lose by not investing. In economics, we call this “opportunity cost,” and it’s real.

If you check out my last post for BiggerPockets, you’ll see the first comment is by BP’s very own Scott Trench. He agrees with this sentiment, stating, “A failure to enter the game is a much bigger risk.”

Truth is, you’ll never know everything. I’ll never know everything. I started this article speaking about all the things I didn’t know. All the things I still don’t know. Now, I know there is a bunch of stuff I still don’t know. Why do I have the confidence to keep investing?

Because I know there are very few problems I will come across that someone else hasn’t. I know that the internet makes it pretty darn easy to find info, and it won’t be too hard for me to find someone who has faced this riddle and solved it. I can usually just piggyback off their solution and save myself a lot of time. Shoot, there’s a very high probability I will find the solutions to my problems here on BP, either in the blog or on the forums.

It’s just much easier these days to find stuff.

Let go of thinking you need to know it all. You will find yourself learning at an exponential rate once you get some skin in the game and own a property. So find something small if you’re worried, run it by a few others you trust, and if it sounds good, buy it and rent it out. That’s how you’re going to learn. And you’ll realize this whole thing isn’t as scary as you’ve made it out to be in your mind.

4. Don’t trick yourself into thinking you’re an investor when you’re an analyzer.

This one is weird, but it’s true. So many people love to talk about the game and think that means they play it. They understand all those acronyms I mentioned earlier. They love to play on the calculators to estimate returns. They read all the articles, scour the internet, and know what the experts say. They are totally immersed in real estate.

But don’t own any.

Don’t be that guy. Make no bones about it, we do this to make money. You aren’t going to make money by talking about it, you’re going to make money by being about it. Don’t be fooled into thinking you’re making progress because you’re giving your opinion on the forums or you can recite Robert Kiyosaki verbatim. Knowledge gained without being put to use is useless and a waste of your time.

Real estate isn’t fantasy football. You don’t get points for watching others playing and winning.


5. Realize not knowing where the market’s going is OK.

This one is tough, I’ll admit. I myself spend a fair amount of time worrying about if I should be buying, selling, waiting, or spending. None of us really knows. It’s easy to see how this can cause a lot of people to hesitate. But let me tell you why it’s ridiculous to constantly use this as an excuse.

When I started buying in 2009, the market was at or near its bottom. When people look back, they often say, “I wish I had bought back then. I would have made a killing. It’s just too late now, prices have already risen.”

The problem with this is, back in 2009, everyone was saying the economy had collapsed and we were fools to buy! Why do you think everything was so cheap? Because no one was buying it, that’s why! It felt like a huge risk. Like things were going to get worse or possibly never recover. All the news was saying that America had been struck a death blow, and the great recession was coming.

So everyone clutched their money close and didn’t want to risk it.

Now, I’ll admit, a great recession might be coming again. Or it might not. I don’t know. You don’t know. Nobody knows. It might come and be followed by a huge comeback. It might not come at all, and prices might just creep up forever. None of us knows! So talking about how you would have done something before does you no good now.

Why do I have confidence to keep buying when the market is already “up”?

Because of cash flow. Cash flow is the great equalizer in real estate. If the market goes up, I can make a bunch of money and sell. If the market goes down, I don’t lose crap unless I sell. I don’t need to. I can just let the cash flow pay for my mortgage until the market turns around again. It’s an amazing hedge against bad markets. My renters are assuming a lot of my risk for me. That’s one of the reasons I buy real estate instead of other investments.

There is a reason real estate has done so well over long periods of time. Markets go up and markets go down, but if you have a tenant, you can ride it out. I don’t know what the market is going to do, but I know people are likely going to need a place to live.

6. You CAN overcome lack of sufficient reserves.

Honestly, this is the one reason I usually agree is a good reason not to get started. Having healthy reserves is crucial. When I first started, I was hesitant to buy until I had a significant amount of reserves built up. The problem was, I didn’t know what was healthy. I thought I needed to have enough saved up to pay for every single property for two years, with 100% vacancy. Pretty silly.

Looking back, I didn’t need that much. Especially with lots of disposable income. However, if you’re not buying because you don’t have enough in reserves, that’s still no excuse.

What good reason can you have for not saving up enough money yet?

Real estate investing is still investing. It is putting your money to work for you and assuming some risk while doing so. If you’re trying to use RE as a vehicle to build wealth but you aren’t actually building wealth with what you already have, you’re not ready for this. RE is not a financial savior for you. In all practical terms, it does take money to make money. If you want to play in this space, you need to be saving money. Not having reserves is not an excuse. Start saving reserves today.

Related: Want to Lose All Your Money & Cry Yourself to Sleep? Make These 4 Newbie Mistakes!

7. Finding a support system is very possible.

I think at one point, this was a legit concern. Today, however, it’s not.

We have BiggerPockets, the internet, REI meetings, books, blogs, articles, paid RE sites, free RE sites, and coaching. You want it? It’s out there.

I agree a support system is necessary, but if you’re reading this, you have access to one. I’m here, BP is here, tons of investors are available on the forums.

Not getting started because you don’t have a support system is just silly. Start reaching out and finding one. I wish I had.

In Conclusion

If you are still unsure what to do to get the ball rolling, send me a message on here. I love to help, and I remember what it was like being new and feeling alone and scared.

If know someone who feels alone and scared right now, please forward them this article. Sometimes it helps to know that you’re not the only one feeling that way.

If I had known about a site like BiggerPockets when I was getting started, I honestly believe I would have twice as many properties right now. I know it’s hard to believe when you’re new, but real estate isn’t rocket science. You are likely much, much closer than you think to getting started and putting together a portfolio of income property to support you in retirement.

Your future you is dependent on present-day you to put things into action. What you do today matters.

Don’t be like me. Don’t let silly things hold you back from an epic future. There is an answer to whatever questions or objections you have. Go find them!

[Editor’s Note: We are republishing this article to help out newbie investors who found BiggerPockets more recently.]

Newbies: What’s holding YOU back from investing?

Let’s talk through it in the comments section!

About Author

David Greene

David Greene is a former police officer with over nine years of experience investing in real estate that includes single family, multifamily, and house flipping. David has bought, rehabbed, and managed over 35 single family rental properties, owns shares in three large apartment complexes, and flips houses. He also owns notes and shares in note funds. A nationally recognized authority on real estate, David has been featured on CNN, Forbes, and HGTV. Now the co-host of the BiggerPockets Real Estate Podcast, David has a passion for teaching and helping others grow wealth through real estate. In 2016, David started the "David Greene Team" and became the CEO of the top producing Keller Williams East County team as well as the top producing real estate agent. The author of Long Distance Real Estate Investing and Buy, Rehab, Rent, Refinance, Repeat, David has won several awards including second place for real estate book of the year awarded by the National Association of Real Estate Editors (Long Distance Real Estate Investing).


  1. jon levine

    as always great article David. I find the hardest part for me is picking an out of state location and figuring out if the area makes sense to invest in. Any specific metrics you look for when investing out of state?

    thanks again

    • David Greene

      Hey Jon,

      First off, great question.
      Second, inbox me about this.
      Third, there are definite metrics I look for, but it’s not only about that. Sometimes you have to go where the fish are biting, not where you think the lunkers will be.

      • Daniel Monk

        Hello David,

        Great post! I have the same question as Jon, I’m having a hard time picking an out of state location for my first purchase (I’m in CA East Bay.) I’m preparing to start building a team, just having a hard time deciding where to plant the seed. Do you have any posts about this?

  2. Daniel Dietz

    “Real estate isn’t fantasy football. You don’t get points for watching others playing and winning.”

    One of the most truthful and clearly worded sentences I have read in a blog in a while 🙂 I did that for WAY too long – glad I am in the game now instead of just watching from the sidelines.

    Thanks for the great read, Dan Dietz, 3d Property Investments

    • David Greene

      Thanks Daniel!

      Real estate is one of the few things where you can actually get in the game no matter what shape you’re in. The fun of winning at fantasy football is nothing like the feeling of beating your competition to score a touchdown.

      Unfortunately fantasy football is as close as I’d ever get to doing that. But with RE, all of us can compete.

  3. Pablo Soto

    Amazing post David. I’m a college sophomore just starting out in RE. I have no money, no experience and no connections. Do you think I should get a job at a Property Management Company to start getting to know people and learn the ropes of the business?

  4. David I just finish listening to your interview in the Bigger Pocket podcast a few days ago and now reading this article from you really drove home some points. The analysis paralysis is always a key obstacle that comes up in the podcast. As a college student I have began my RE journey today by creating an account and consuming as much content as possible. But I agree with you 100 percent that the real journey starts till you get your hands dirty and get into the game.

    • amaury zambrano

      Thank you so much for this article. I love number 4. Everything you said describes me. In my case Ive worked so hard to get to where I am right now. I was able to get a nice amount of liquid cash to start investing in Los Angeles but still haven’t been able to follow thru. Very inspiring article

  5. DeAnna Fraser

    Great read! Thanks for being honest and open! I’m actively looking but no deals yet and I definitely have analysis paralysis. I make offers but I’m always scared of what may truly be the outcome of renovations and whether my numbers are accurate or not.

  6. Mayank S.

    wonderful article! probably one of my favorites and it does lit the fire for many like me to take action every single day..push push push until you get what you are looking for. Big motivator and thanks for writing it so crisp and clear.

  7. Jack Macioce

    Thanks for the great article! It came at the right time. I am going to be moving out of my current residence in about a month. Five years ago, I bought it with the intention to rent out after I fixed it up a bit and was ready to move on.

    Today, I can sell it and pull down enough cash to cover my improvements and closing costs, plus some. However, my house is in an area you describe above and the rental market is very hot right now. Really trying to decide whether to take the equity now, or rent it out.

    A concern of mine is how I would deal with tenants (needy, destructive, etc.). After reading number 3 and 7, my perspective has changed and that concern isn’t so much a concern anymore.

    Great stuff!

  8. Jacob Calbillo

    Great article….living in Texas where the market is exploding, I have used the I am going to wait till the market settles excuse before and you’re right. RE does act as a hedge against a bad market so long as you have renters in your house, you can just wait out the market until it recovers. Thanks!!

  9. Nadjalisse Rodriguez

    I usually skim straight to the listicle portion of the articles, but this is so well written, that I just had to read every word. Thank you for sharing your experience. It’s always great to relate to someone’s journey as well as learn from their lessons. Cheers to your success! I’ll be checking out your fancy website shortly.

  10. Toby Rey

    Great article. Like every opportunity worthwhile taking action is the thing to do. What is holding me back at this time is finacial resources to buy my first unit. I have my primary residence which we held on to through the 2009 crash and now we have equity in again. I can turn it inton my first rental and have someone else pay the mortgage stay in it, or sell it. There are advantages and disadvantages to either course.

  11. Lori Vines

    Fantastic read David, and after recently listening to your awesome podcast too… such an inspiration and I absolutely love your authenticity and transparency. Thank you for sharing- it’s so true! and.. a little humility goes a long way. well done and keep up the great work!

  12. Fred Domervil on

    My name is Fred Domervil. I’m very interested in real estate investment. I started to read about this subject about two months ago. I started with tax liens and tax deed certificates, then fixer upper, rental properties and turnkey rental. Right now I’m very confusing. I want to build some cash to go forward with my business, but I do have little money. I don’t know where to focus my energy . Please help me out. Please tell me which one among the real estate areas I mention above will better for me to begin with. Thank you for your help.

  13. Chris Falk

    Thank you for the article David. I was WAY caught up in analysis paralysis until a month or 2 ago and articles such as this one help remind me to shake myself out of that state. The flip side of BP, various RE advice podcasts, books etc is that an info/learning junkie like me can let himself get way too deep into the over analyzing and pro/con of every freaking decision……..lose site of forest for the trees!

  14. Courtney Sorrell

    Great advice here, and much appreciated. When you talk about sufficient reserves, is there a formula based on value or NOI you use with each property? I’d love to drill down into the process of reaching a number and ensure that my reserves are there.
    Thank you!

    • David Greene

      Well the truth is that number is different for anyone. If you make a lot of money every month and don’t spend much, you can keep less in reserves because you can just make the money back quick if you need it.

      If you save much less money every month, you’ll want to keep a lot more in reserves.

      The BEST way to approach it is to think about more than just RE investing. Think about increasing your income and decreasing your spending as well.

      That way “reserves” will never be a problem.

  15. Lorna Slenkai on

    Great advice that I wish I had read sooner. My husband and I are newbies and unfortunately purchased a property that needed more work then we originally planned on. We will still make a profit, but not as much as we hoped. We are doing a lot of the work ourselves to save the money we would have spent on contractors and put that toward our profits. Luckily we are both handy and not afraid to get sweaty and dirty. But we DO NOT want to make that mistake again. Any words of advice for us. Thank you.

    • David Greene

      Well, it looks like you learned a few lessons.

      1. You make your money when you buy.
      2. LIke Josh says, always factor in for property management when running your numbers so if you have to use one you’re ok.
      3. Have contractors tell you what’s wrong with a house (or a home inspector) BEFORE you buy it so you don’t get caught by surprise!

      Good news is, this will hopefully be the worst deal you ever do. you paid the price of admission, and now it’s up up and away!

  16. Adam Ulery

    David, this newbie thanks you! I found your article inspirational and motivating. Loved the BP podcast you were featured in. I’m going to follow you on BP and keep reading your articles. Thanks for sharing your wisdom. I will pay it back one day, too.

  17. Kevin Griffin


    An excellent article, which every newbie should print out to keep for needed reference in the future. I was one of those *have to know the whole picture* people, which unfortunately kept me on the sidelines for many years. I do believe you should make sure you know enough to keep yourself out of trouble; but now after going through my very long period of inaction, it’s easy to see that I was way beyond that for many years. However, I’m now going to pull the trigger and start with wholesaling, followed fairly quickly by rehabbing, and possibly multi-family/apartment down the road. At the moment, I’m looking for a site that I can get forms from that are legal in Florida, or better yet, a site that has the forms for all the states. Any suggestions? Thanks for your time.

    K.F. (Jack) Griffin

  18. What a great introduction followed by a even more powerful list of things you wished you knew as a real estate newbie. As I work my way into real estate I have many of the fears and hesitations that you list here. I especially like your emphasis on the importance of the relationships you build and how busy nurturing them you actually win the long run.
    Great article!
    Ashley Beekhof

    • David Greene

      Thank you very much Ashley! That’s some high praise right there. Getting started is the absolute hardest part. Every step gets easier after that. Let me know if there is anything more I can do to help you getting started.

  19. Chris Luksha

    This was a great read David! Right now I am hovering at number 4 – I am analyzing whatever I can and still trying to figure out how to do it half way decent. I don’t think I am stuck on it per say – but maybe overdoing it a little? To that point I am looking at a couple duplex properties that I think would be great first tries. Any advice on quantifying the viability of a property would be appreciated. I feel like since I have started here at BP I am in information overload what with the reservoirs of information to drink in.

    Great Article!

  20. Layne Trafton

    Awesome artical David, you’ve really translated a lot of the ways I’m feeling right now! I’m 20 and moved to the Tampa Bay Area by myself at 18 looking to build. I’ve been working like crazy (70-85hrs a week) and absorbing RE content religiously on a daily basis trying to get some money saved to get my foot in the door. The main problem I’m facing right now is I’m anxious to get started but don’t have much capital and it’s difficult to get investors to take a 20 year old with no experience in the industry seriously. Would it be a good idea to get my license? Any advice/info would be greatly appreciated and not taken lightly!

  21. Craig Boatright

    Hi David. Great article. I too have been studying RE, but have “analysis paralysis”. My problem is the nuts and bolts such as the right forms to use for getting properties under contract. I think if I could get past this I would have more confidence in actively seeking out deals. Thanks for any advice.

  22. Kip Metler

    Hello David. As a newbie who is trying to push himself through the the fear of making bad decisions that would negatively impact my family, I found this article and it hit on everyone of my concerns. It was like you wrote down everything that I was thinking and have provided insights with how to address them and move forward. Although I am encouraged and inspired by the entire article to keep moving forward, I’m finding it difficult to actually take action due to my pursuit of perfection in everything I do. While I’m reading books, listing to BP Podcasts on my daily commute to and from the office, and am on BP everyday, your statement of “Knowledge gained without being put to use is useless and a waste of your time” really resonated with me. Do you have any suggestions to help move forward with “imperfect action” instead of “perfect planning”?

    • David Greene

      Oh yeah, for sure Kip. If this is a problem you struggle with, real estate is really the perfect niche for you to get into. Send me a message on here and we’ll talk more about why that’s so.

      You are probably much closer than you think!

  23. Ryan Ohri

    Great post! The #4 point of not confusing an investor with an analyzer was a punch in the got ( in a good way?) I spent the last year reading and consuming everything real estate I could find. Yet I haven’t bought that first rental as of yet.

    However, I’ve taken action recently. Speaking to a lenderd that my wife and I trust, additionally I have a meeting with a real estate agent next week. That first property is within our grasp and we’re very excited and honestly a little nervous/scared too. I appreciate your posts. Your willingness to help out new investors is awesome and very appreciated. I hope I can return the favor some day. Thanks again!

    • David Greene

      That’s great news Ryan! Feel free to message me on here if you want to talk about the deal you’re looking at or what I would do to decrease your anxiety. Sometimes one small answer can make a huge difference in your confidence moving forward!

  24. John D.

    David, you mention “Cash flow is the great equalizer in real estate”. The San Francisco bay area market is crazy and in case of recession it would be difficult to obtain the rents one calculated assuming full employment of tenants. How would you protect yourself from such a situation?

    • David Greene

      Well John, I would not invest in SF! Too many people get stuck thinking they need to buy where they live, not where it makes sense.

      Buying out of state has never been easier than it is right now and I’m writing a book for BP detailing exactly how everyone else can do it too. Send me a message if you’d like to hear more about how I do it.

  25. Leanne Rivard

    Great article! I appreciate No. 1, although, I bought a “bad deal” back in 2003 that I am still underwater on. That one really held me back in 2009 when I wanted to buy additional properties because I felt my risk tolerance was at the limit. I own another 4 plex, but want to invest further for retirement income.

    I recently took the Colorado RE exam, and am starting the process of looking for a brokerage to hang my license. It’s time to take the RE investing life full time! I also want to help others invest. So, this is my No. 7. I would like to work with/around other individuals that have the same goals as I do.

    I live in the Denver area, so No. 5 also struck home for me. The market here is not as crazy as SF, but, it is crazier than many parts of the country.

    Thanks for your thoughts and lessons.

  26. Bert Wright


    Thank you for your transparency! I’m glad to feel that I’m not alone in this journey. I’m about as green as they come to RE investing. I attended my first RE investment club meeting last month in Riverside, CA. I felt overwhelmed and nervous about walking into it. Fortunately, I was able to make some connections and find someone that is willing to help me learn the ropes. With the encouragement of my mentor, I actually went out and visited my first property and did an analysis of it. Ultimately, it wasn’t a good deal, but what I learned during that process was immense and it was a good way to get my feet wet.

    I hope to someday be able to share my success as a newbie on BP.

  27. Cory Damon

    David, your article has struck an exposed and irritating nerve called fear. So many of us – especially me – get lost in the grey area between ignorance and understanding… “more research” becomes an excuse that causes atrophy.
    Thank you for your timely words – and I encourage you to keep putting out the things that are impressed upon you, it obviously helps many of us. I’ve been looking at offers too long, so I commit to putting in an offer by the end of the week. Thanks again!

  28. Jason Lewis

    David, Where can I learn more about SEC accredited investment opportunities? If my calculations are correct I should be crossing that threshold soon and I would like to start learning about the opportunities that gets me.

    Great article,

    • David Greene

      Hey Jason. I can hook you up with a note fund if you like. Currently returning 12% and totally passive. Inbox me for more details.

      I can also get you set up as an investor for apartment complexes as well. Paying in the high double digits interest rate!

  29. Sandra Greenwich on

    Hi David I’m concentrating on been a wholesaler but unable to reach any cash buyers What i’m I doing wrong? And I know others who are having the same problem

  30. Carol Travid

    I am very nervous about getting started because I have no money. I am confused on a lot and I dont know where to start. There is an REIA meeting in my area on Oct.18 I am hoping to find a mentor to help me get started. How do I get a portfolio started? I dont know anything. Please help

  31. Bevla Reeves

    OMG David, exactly what I needed today!!! This is the reason you’re my favorite BP blogger! You’re sooo good at articulating real and honest feelings (fears) that a lot of RE investors new and seasoned have…THANK YOU!

    I’m not ready to invest in rentals yet, but I’ve been stuck behind the hurdle of raising capital for Fix & Flips. I know there’s plenty of money out there, at least that’s what everyone with money tells me, but I just have to find what’s holding me back from finding the right equity partners and asking for the funds.

    I feel like I’m on the verge of a breakthrough though…any day now!! ;))

    Thanks again for the encouragement and great article!!!

  32. Ryan Van Fleet

    Great article David. One of the better I’ve read. It definitely attacks the fear points that I’ve faced. I was just starting to fear about my reserves, but I’m pretty sure I’m. Thanks for the boost.

    Time to fine that next deal.

  33. Hardik Parekh

    Wonderful Article David, I just started looking at properties in Atlanta. Tons of good advice for a newbie. Thank you for that.

    My Personal favorite: “But if I could go back, I would absolutely gobble up everything I could get my hands on in great neighborhoods with incredible schools, close proximity to freeways, very low crime rates, and access to parks and commercial shopping.”

  34. James Dupree


    I am about one month in to being interested in real estate (reading books, reading BP, etc). Two questions:

    1. I plan on leaving for an MBA in a different city in the next 3 years. How do you think this potential reality should change the way I approach investing in real estate?

    2. One of the things that makes me most nervous for REI is rehabbing homes. I have no contacts with contractors and no prior experience of working with homes. What do you suggest when trying to learn about different rehab needs in houses? Books? Working part time for a contractor?

    Thanks for the article. Such honest words!

    • David Greene

      Hey James,

      I don’t think leaving for an MBA should affect anything at all. The process of buying, rehabbing, and managing real estate is pretty much the same anywhere you go. Technology has increased to the point it’s not very difficult to do this remotely.

      As far as the concerns with rehabbing, you’re wise to acknowledge this. This is probably the part with REI investing that most investors struggle with more than anything else. With the clients I coach, I show them my contractor bids/contracts and go through them line by line. That way they can see what I’m seeing and understand my thought process when I look at it. If you can’t hire a coach, I would start by reading my article here:


      Next, start speaking to other investors on here who are managing rehabs in the same area you are looking to invest. Ask them what they pay for things like flooring, paint, countertops, etc. Once you get an idea what they pay you will have a better idea what is reasonable to pay yourself.

  35. Theresa Manchester

    Adding to the choir of “Thanks for the article”. I’m a full time artist and the only skills I’ve truly mastered in my business (outside the creative stuff) relate to building relationships with people, planning legistics, and all the management skills that come from independently running a demanding but profitable freelance career. Though that gives me confidence and faith in myself to get it done and follow through, I’m still quite overwhelmed with the amount there is to learn. Like everyone else, I do feel quite alone and fearful. And frankly, tons of numbers are scary to some of us! Trying to figure out what math adds up and what is or isn’t a good deal or worth the time is enough to make you want to quit before you even begin. You’re right – not everyone has helpful contacts or other advantages starting out, and “feeling ready” is truly a procrastinator’s lullaby. Self employed with no retirement plan, I chose real estate as a safety net to float me in my working years, and protect me into old age. There’s no better time than now! I’m looking forward to finally checking out my first few must-see properties after the holidays. Thanks again for the nudge.

  36. Claudio Golia

    Thanks so much for this article. Some great items covered and really hit home. I’ve been on BP on and off for more than a year trying to learn and gain as much knowledge as possible, However, I’ve definitely fallen into the “need to know everything” trap, and it’s paralyzing. I believe I’ve past that stage, and now my focus is reserves, I need to build more. It’s much tougher to move into RE with a family who depends on you. I constantly let the notion of what can go wrong and what I can lose stand in my way, as it would hurt more than just myself. That said, that’s something you can deal with by starting small, mitigating risk wherever possible and saving for your RE goals. A supportive partner is key as well if in a relationship or marriage.

    Looking to make 2017 a year where I start small and get into the game for both my family and I’s future.

    Thanks again!

  37. Dave Kinkade

    Excellent read, David. The ending was profound and quotable: “Your future you is dependent on present-day you to put things into action. What you do today matters. Don’t be like me. Don’t let silly things hold you back from an epic future. There is an answer to whatever questions or objections you have. Go find them!”

    Reading this article was time well spent.

  38. Enrique Selman

    I have a question,
    If my business isn’t registered in a state that I want to do a wholesale deal can I still put that property under contract in said state and sell that contract to a buyer that’s in that state where my business isn’t registered?

  39. Michael bellamy on

    I’m 25 yrs old currently rebuilding my credit and trying to save towards my first property…but I’m super ready to get started I’m just overwhelmed with the starting point I feel like I’m doing something but not doing anything at all

    • David Greene

      The best thing you can do is focus on paying off your debt and finding a job where you can maximize the money you make. Don’t worry about the steps you have 10 steps down the road, just focus on what’s right in front of you first.

  40. Jimmy Jamz

    This may be the single best article I have read on the entire subject or real estate risk reward. I am very new. I always believed in nearly every item you mentioned. Until I learned that I wouldn’t ever know until I DID something – not just pontificate.

    Excellent, excellent article. Thank you.

    – jason

  41. Ethan Capone

    Thank you for writing this article. I’m a newbie but I’ve bought a sfh and a duplex as buy and hold investments and now own a primary residence, a condo in Honolulu, a very difficult market for cash flow! Looking to utilize my HELOC and make another investment, my goal all along has been to cover living expenses with passive income from real estate investing, so I want to get to where you are! I’ve been looking in Memphis, Dallas, and portland Maine, where I’m from originally, nothing yet, would love your opinion, feel like this (even more than usual) is a crucial stage.

  42. Mary Wade

    Hi, great article. My husband and I live in Canada and currently own two properties. We’re both approaching retirement and are concerned that maybe we’re too old (I’m 54 and he’s 57) to continue to buy using our own HELO as the source of a downpayment. We’re interested in a couple of “student” housing options (can potentially make way more cash flow per month by renting out rooms to 4 individuals as opposed to renting the house to a single family) that are within a 3 km radius of a large college. We looked at two but got gun shy thinking about owing that kind of money 5 years before retirement. Is our thinking skewed? I ask this because we too are petrified of those big numbers. Any advice you can offer would be greatly appreciated.

    • David Greene

      Hey Mary,

      Let me ask you this-are you owing money, or are you paying off an asset with money that asset makes for you?

      If you were considering buying a franchise such as McDonald’s or Jiffy Lube, would you care about the interest on the loan you took to buy it, or the revenue it was going to generate?

  43. Emily Peak

    thank you for your wonderful advice. I have a goal of making extra principal payments on my mortgage to get rid of the annoying PMI, and building equity. At the same time, I am going to start adding to my savings account. What is the least amount I should have saved before I attempt to buy investment property? I was thinking about doing the home equity line of credit to use towards my first investment. This is truly overwhelming for me, because I know I have a lot to learn! Thanks!

  44. Roslynn Jackson

    Great article! Thank you so much for sharing your insight. I have the same insecurities that you had. I still feel nervous about making offers, wondering if they are too high or too low… wondering if repair estimates are too high or too low… wondering if I should go for just investing in rental properties, given my end goal of passive income. Honestly, I’m still confused about that one. I have limited savings, and I’m afraid of making a financial mistake that will cause me to start from scratch again. But, thank you for this article. It’s definitely a kick in the pants!

  45. David Greene I’m David Blue. Nice article. I’m a software engineer by trade 35 years of coding. I’ve had my NY RE brokers license for 23 years but never used it. I recently got broker reciprocity through NY with Mass and Rhode Island. I live in Mass and work in RI as a software engineer. I am currently trying to put my first RE venture into play and have a 8 year plan so that by the time I retire I can take advantage of technology coupled with its suite of RE tools and have a thriving business in place for a one man operation. I know I’m a little late coming off the bench but I’m ready to play. Where do I find good mentors at my age. I learn quickly.

  46. Kareem Sykes

    From a newbie: This article was fantastic!

    Having just recently organized a small investment group of 8 young professionals here in Maryland, who are eager to capitalize off of our combined financial power insofar as residential real estate investing is concerned, I am wondering if anyone can offer any insight into whether a traditional bank will consider each of all 8 member’s personal incomes, DTI and credit scores, towards the purchase of investment property assuming we formed an LLC?

  47. Shaun Mckbight

    I’m a total greenhorn. I do have a mentor, his name is Russ, but, you said if I’m feeling “alone or scared” to email you. Yup, that sounds about right. I made an offer on two houses to flip, thank god those fell through. I tried to buy the guys house I was living in that was house hacking, come to find out even though he just got done spending 30 grand on rehab he has more money than he knows what to do with. I tried to put together a deal with getting three property owners together so I could change a pocket of duplexes (4) from a blight into a nice area in Punta Gorda, the listing agent for the first one didn’t ever call me back. I tried to buy a duplex in Cape Coral, but the guy wanted 100k over fare market value. I have tried and tried again to get something going but nothing has worked. I would like to get a tri or quad but have found out they are in short supply. I really want to get into the game but it seems like every time I try I seem to hit a wall. FYI I have ben at it sense last September.

  48. Evelyn Kop

    This was a great article! I may be a little late to the party but were new investors and excited about getting started. We are totally priced out of our market so we’re looking at different communities but its hard to decider where to buy. I’ve also looked into turnkey companies since we will not be able to manage the property being so far away…but how to decide on a reputable turnkey company. They all have great numbers…. any advice or insight would be greatly appreciated!

  49. Angela Hagen

    I do understand this business is about relationships but those take time to build. I am working on that. What paralyzes me is not having any relationship with lenders. I would like to try some wholesaling but I am afraid if I get a property under contract I won’t be able to find an end buyer because I don’t have those relationships.

  50. Tom Geiger

    “Don’t ever undervalue the importance of relationships.”

    I read through all the comments and people seemed to have read right past this. The very foundation of successful business is relationships. Having good people who want you to succeed in your corner isn’t just important, it’s imperative! The people who you least expect to help you will be the very ones who will come through for you !

    The art of business negotiations is that everyone must be successful if a deal is to come to successful conclusion. Everyone has the common goal to be successful and make a living. You cannot force a vendor into a money losing deal. They have lost the ability to perform that service for you. The people that you nickel and dime will bring the next deal to someone with better business skills! Never focus on the immediate quick win, always plan for the long term. Relationships are key to winning!

    And a bit of my own advise… treat everyone equally well. I make sure I know the name of every person on the crew. At the end of the day I thank each one of them. An out of work carpenter I knew socially got me out of a jam when I had a construction company go bankrupt and disappear from a project. My very first listing as a realtor was from the cleaning lady at my previous employer!

    And leave your Mercedes at home when you collect rent! I have an old Dodge Caravan I use as a work van. You don’ t need people thinking you are affluent on their backs. When I was buying my 10 year old Jaguar at a Rolls Royce dealer, I asked the salesman a bit about their customers. I learned that the average Rolls Royce buyer buys the car for personal use, most transactions in cash. A CEO will not bring that car to work, opting for something common like a Ford Explorer as his business image. The age of conspicuous affluence is over!

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