Things you've learned not in RE books or podcast?

[Mark F.]

May have been done before, but what are some things you've learned over the years you never hear about in real estate podcast or books? I've got a few.

This helped me just starting out but moving the mortgage payment date as late as possible, mine are on the 15th. I do this in case rent is paid late, I had to switch banks, moving money for whatever reason, etc. To me it buys me an extra week as things happen. Has helped me a few times in the first year working out all the kinks. Didn't cost anything and was super simple as the mortgage servicer always asked me when first getting set up online.

Paying money to fix a roof (or anything really) when it's passed its useful life or you know you'll fix it soon anyway. Common sense, I know. I paid $1k total for two separate roof repair leaks when I was told the roof was passed its useful life and was planning on replacing it anyway within a year or two! When it leaked, I should have just bit the bullet and scheduled the roof replace. Lesson learned.

Most costly lesson to date. Make sure you walk your property to check for retaining walls and/or get a survey during closing/inspection. Everyone (realtor, property inspector, myself) saw there was a drop off behind the property but never thought to see if it was my responsibility and what kind of shape it was in. Within a year, I had to have it replaced due to code enforcement to the tune of $10,500, adding zero value to my property! That one stung but you know I will never make that mistake again! Heres the BP thread I made on it. https://www.biggerpockets.com/...

What are some uncommon or things you never hear mentioned?

[Joe Villeneuve]

Pretty much all of the things you mentioned here I've been told on a number of different podcasts, in many books, and by many paid for seminars on REI.

What I learned (really early) is it's cheaper and faster to learn what to do right when you learn it from others that have done it right already.

I also learned (not early enough) what you learn from doing it yourself, is more of what not to do than what to do, and it's far cheaper and faster when you learn that from others who have made those mistakes before you.

[Michael Vittorio]

Mark,

Thanks for this post! These are definitely some head knickers. Sounds like you got through them well! Just maybe a little more expensive of a lesson than you might have hoped. 

[Mark F.]

Quote from @Joe Villeneuve:

 I agree, I enjoy hearing about peoples mistakes as I take more away on what not to do, than all the people who share their success story.

I'll be honest though, a lot of the podcast and books I read are not very nitty gritty with specific tips and tricks. I've never heard specifically the things I've mentioned. Any recommendations on real estate podcast that get into that topic? I listen to the big ones, BP RE, The Real Estate Guys Radio, and more that talk about RE news/data/trends.

They mainly seem to be more 10,000 foot view and how they got there or managerial/scaling tips. Not that there is anything wrong with that. I know I do hear and read a lot as well "there's only so much you can listen to and read, the rest you learn as you go". 

[Leo R.]

@Mark F. excellent question...I've learned a lot about property analysis from podcasts, books etc., but there are certain aspects of property analysis that I've had to learn mostly from experience.

I often think of property analysis in two ways: 

First is "the paper assessment" (which includes the P/L spreadsheets, the appraisal, SQ footage, data on the local market, and all other info that can be easily conveyed on paper--or at least on a computer).  You can learn a lot about "paper assessments" via podcasts, books, youtube videos, etc.--for instance, you can learn how to analyze a property's financials via podcasts, articles, etc.

Second is "the physical assessment" (which includes all of the things that CAN'T be easily conveyed on paper or on a computer--these are things that often require a skilled in-person assessment of the property and neighborhood). For instance, knowing where the load-bearing walls are, knowing what types of tenants the property will attract, knowing the routing of plumbing & condition of the sewer main, knowing how noisy the street is, knowing that the house has a serious settling issue or water diversion problem, and--importantly--knowing how the property could be changed to force appreciation/rent. These are all things that are NOT easily conveyed on paper. Moreover, many parts of the "physical assessment" cannot be easily learned via books, podcasts, etc. Instead, the best way to learn about these issues is through experience--personally viewing lots of properties and having discussions with GCs, PMs, and other pros...

Here's an example: I once bought a 2 br, 1 ba A property in an A neighborhood at a discount because it was on a moderately busy street that turned off retail buyers (but it wasn't so busy that it would turn off tenants). This is info that you only learn by visiting the property. The property had an unusually large entryway that didn't have much use, and small bedrooms that probably turned off other buyers (again, I only learned this by visiting the property).  I bought the place knowing I could easily convert part of that entryway into a bathroom, and expand one of the bedrooms into the space--creating a nice large master suite. Because of the layout of the existing walls, and the routing of existing plumbing, ducts & electric, I knew it would be a fairly simple and inexpensive operation (again--I only knew this because I visited the property)...after the work was done, it transformed the place from a negative cashflow property (that mostly only appealed to college kids) into a cashflow positive property that appeals to couples, couples with a child, well-off single people, and pairs of housemates.

The "physical assessment" and the ability to see the potential of a property is a skill that can't be easily learned via books, youtube videos, etc.--because it requires actually going out and viewing a lot of different properties in-person, learning to spot opportunities that aren't apparent to other buyers, learning from GCs what is (and isn't) easily do-able, learning from PMs and agents about the local tenant pool and the unique dynamics of the neighborhood, etc., etc.

Books, podcasts, youtube videos are incredibly valuable, but there are many aspects of real estate that are best learned through direct experience.

[Celeste Carter-McAfee]

Quote from @Leo R.:

@Mark F. excellent question...I've learned a lot about property analysis from podcasts, books etc., but there are certain aspects of property analysis that I've had to learn mostly from experience.

I often think of property analysis in two ways: 

First is "the paper assessment" (which includes the P/L spreadsheets, the appraisal, SQ footage, data on the local market, and all other info that can be easily conveyed on paper--or at least on a computer).  You can learn a lot about "paper assessments" via podcasts, books, youtube videos, etc.--for instance, you can learn how to analyze a property's financials via podcasts, articles, etc.

Second is "the physical assessment" (which includes all of the things that CAN'T be easily conveyed on paper or on a computer--these are things that often require a skilled in-person assessment of the property and neighborhood). For instance, knowing where the load-bearing walls are, knowing what types of tenants the property will attract, knowing the routing of plumbing & condition of the sewer main, knowing how noisy the street is, knowing that the house has a serious settling issue or water diversion problem, and--importantly--knowing how the property could be changed to force appreciation/rent. These are all things that are NOT easily conveyed on paper. Moreover, many parts of the "physical assessment" cannot be easily learned via books, podcasts, etc. Instead, the best way to learn about these issues is through experience--personally viewing lots of properties and having discussions with GCs, PMs, and other pros...

Here's an example: I once bought a 2 br, 1 ba A property in an A neighborhood at a discount because it was on a moderately busy street that turned off retail buyers (but it wasn't so busy that it would turn off tenants). This is info that you only learn by visiting the property. The property had an unusually large entryway that didn't have much use, and small bedrooms that probably turned off other buyers (again, I only learned this by visiting the property).  I bought the place knowing I could easily convert part of that entryway into a bathroom, and expand one of the bedrooms into the space--creating a nice large master suite. Because of the layout of the existing walls, and the routing of existing plumbing, ducts & electric, I knew it would be a fairly simple and inexpensive operation (again--I only knew this because I visited the property)...after the work was done, it transformed the place from a negative cashflow property (that mostly only appealed to college kids) into a cashflow positive property that appeals to couples, couples with a child, well-off single people, and pairs of housemates.

The "physical assessment" and the ability to see the potential of a property is a skill that can't be easily learned via books, youtube videos, etc.--because it requires actually going out and viewing a lot of different properties in-person, learning to spot opportunities that aren't apparent to other buyers, learning from GCs what is (and isn't) easily do-able, learning from PMs and agents about the local tenant pool and the unique dynamics of the neighborhood, etc., etc.

Books, podcasts, youtube videos are incredibly valuable, but there are many aspects of real estate that are best learned through direct experience.

[Celeste Carter-McAfee]

I love this! @Leo R. nailed it. I would also add, follow your nose. I open all the cabinets and take a big sniff. I purchased a foreclosure that looked great, but had lots of air fresheners all over the house. After I purchased and completed reno, I could not understand why the musty smell persisted in a corner cabinet. When I decided to replace the kitchen countertop, I discovered that the builder or contractor nailed an upper cabinet that hit the main drain from upstairs bathroom. Over 15 years, of a very tiny drip created black mold in the wall and behind the cabinets. It was not observed from anywhere upon inspection and could only be seen when the countertop was removed. The kitchen cabinets and all the drywall had to be removed with mold mitigation protocols and completely rebuilt. It still was a money making endeavor, but I will from now on always sniff each and every cabinet and make sure to be extra diligent when I see air fresheners to cover smells. 

[Chris Davidson]

@Mark F. a cheap fix band-aiding the issue will cost more than a costly repair done right. Also many problems can be solved working backwards. 

Work your plan. There are some loud voices out there saying if you don't do REI this or that way you are doing it badly. However as long as you are meeting your goals and needs who cares. Competition is good comparison is not worth the energy.

[Bruce Woodruff]

Hmmm, I've never read a REI book, or listened to any Podcasts....I gotta get out more, I guess.

But this industry is mostly common sense. Buy smart, do your research, don't rely on all the new social media crap. Pay no attention to what the market is doing, it is always a good time to buy, or sell....don't follow any rules...

Don't choose the cheapest Contractor or materials, ever..... follow the local rules and codes, this will save you big money.

Don't cheat, and be fair. Never hurts to be nice to people....

[Mike Dymski]

Podcasts are the Falsebook version of investing...all the good and hardly any of the bad.  Plus, most are interviews with full time investors that are running businesses rather than the part time investor that can't relate.  When was the last time we heard a podcast where the guest or host described how a recent deal worked where the cap rate is lower than the interest rate?  Never.  Same for discussions on the forums.  All we hear or see are not-so-hidden advertisements from hosts, guests, or members who are running real estate businesses, raising capital, and selling.  And, if you ask probing questions, you look like the bad guy calling them out or getting in the way of them making a living.