“IT DEPENDS” - the real answer to most questions in Real Estate

[Alex Ficco]

“IT DEPENDS”

The answer we don’t like to hear, but is the real answer in most cases.

I can’t tell you how many times I’ve used this answer when asked a question about real estate. We like things to be black and white, cut and dry, but usually they aren’t.

There are so many different ways to skin the cat in real estate. And the problem is they all work. But it seems like people are always searching for that magic bullet that just isn't there.

This is the reason that I really LIKE and DISLIKE the Bigger Pockets Podcast. It's super interesting to hear people’s stories in all different stages of their investment career executing all different strategies, but I think it does a disservice to some people.

You hear about a kid doing millions in assignment fees wholesaling. Cool, that sounds pretty good. Love wholesaling. Next week you hear about a syndicator buying with other people’s money. Cool, that sounds pretty good. I’m going to do syndication. Next week it's Seller Finance Guy. Cool, that sounds way better than going to the bank, that’s my thing.

Which one of these is the best strategy? ...IT DEPENDS. Is wholesaling the best strategy? It was for me when I got started, because it was the only one I could figure out with my current available time, money, and risk tolerance.

Knowing what I know now, could I go buy an off-market multifamily building using none of my own money (like I wanted to do before I got started)? Yep… but there’s absolutely 0 chance in hell I could’ve done that as my first deal without starting in wholesaling (learning how to market to find off-market deals, talk to sellers, etc), getting into flipping (learning how to raise private capital, learning about rehab, operating deals, etc.) and holding some rentals along the way.

You can always change the strategy later as you get better, but I see it so often at the local meetup I run in Reno NV… people don’t give themselves enough time to do a SINGLE strategy before switching up and going after something else… ultimately resulting in 0 deals done across ANY strategy.

You can see the same phenomenon when talking to people about deals even in the same strategy. People are always asking “is this a good deal?” … IT DEPENDS.

I know a ton of flippers that buy a few $0 cashflow West Coast SFR's per year. Are they idiots? To the guy that only buys South East SFR's mainly for cashflow, yeah probably. But they do it for the accelerated depreciation to eliminate their tax bill from the flipping company. Different strategy within the same strategy. Are they good deals? … IT DEPENDS.

I saw this just YESTERDAY on a wholesale deal I posted for $340k. An OG buyer offered $285k. Another buyer laughed at me when he asked about rehab and I told him if we were going to take it down, we’d spend about $20k (meaning he thinks it would be much more), and I had another buyer use the “Win It Now” feature on investor lift and take it for $350k without even walking it.

Is it a good deal at $350k? … IT DEPENDS.

If you’re stuck getting going or scratching your head as you’re seeing deal after deal sell for way more than you think it's worth, hopefully that helps.

[Caleb Sonneman]

Like David talks about in the Podcast, everyone wants a cookie-cutter answer. It’s this “easy button”, tell me what to do mentality. It’s more work to know yourself, take responsibility for your journey, and take a risk (educated). I’m in sales and I get that question a lot and use the same “it depends” response. Everyone is different. Everyone is in a different place in their journey, and has different goals. 

[Mike Dymski]

Making decisions with incomplete information is a learned skill (that not everyone learns).

[Greg H.]

Success in this business hedges on one’s ability to solve problems. Every and I mean every deal is different. 

[Chris Seveney]

@Alex Ficco

Great post. Also I think far too many people have FOMO because sites like this typically only share wins

Here is a great analogy

https://www.tiktok.com/t/ZTRoqP15r/

[Bo Huang]

Great post Alex!

I love this post because I feel exactly as you described. I have been an avid listener of the BP podcast as I am a brand-new investor. I struggled to decide what strategy I wanted to pursue first since each strategy has its own pros and cons. After reading your post, I think I should start in wholesaling as well. I wish I was in Reno to learn from your meetups, you sound like a great mentor and investor.

[Bill Schrimpf]

@Alex Ficco - Great post.  Yes, all the ideas, podcasts, books, forums that BP has available is kinda like drinking from a fire hose; overwhelming.  Its hard to focus.

I do miss the "good ol days" when Josh Dorkin and Brandon Turner ran things and really were the little guys.  The new team is good too.  All across BP there is a strong sense of selling a product that just was not there a few years ago.  Not to knock the new team down, I'm all for making honest money, but the emphasis on driving revenue on the site and related products exacerbates the problem you clearly articulate!  Look at all the Premium memberships.  They are NOT cheap...

All that being said, I still really like BP, it's an amazing resource and regularly tell people it's a good place to get good advice; usually, it just depends :)

[Bill Schrimpf]

@Bo Huang - Almost right away, when I'm working with new clients and people investing in Reno, NV I'll figure out their money situation.  Then time.  

Time and money, more than anything else, tend to drive behavior because they tend to be the most influential levers in a transaction.  Reflect on your time and money, pick a strategy that fits and go!  

[Allan Smith]

It depends is a lazy answer in my opinion. Most of the time someone is asking a general question to get a general answer, so answering with it depends it's kind of useless. Give a general answer, then ask some questions to get to the heart of it.

[Michelle Crochet]

Thank you for sharing your thoughts on the complexity of real estate strategies. I totally get what you're saying! It's true that there's no one-size-fits-all answer when it comes to real estate. Sometimes, the response we least want to hear is "it depends," but that's often the reality.

I can relate to the feeling of wanting a clear-cut solution or a magic bullet that will guarantee success. But the truth is, there are so many different ways to be successful in real estate. Wholesaling, syndication, seller financing... they all have their merits, but what works best for you depends on your own circumstances, available time, money, and risk tolerance.

It's interesting to hear about your journey and how you started with wholesaling and gradually expanded into flipping and rentals. It's a smart approach to build your knowledge and experience in different aspects of real estate. And you're absolutely right, giving yourself enough time to master a single strategy before jumping to something else is crucial!

[Evan Polaski]

I believe you see this the same way I do: this is a chance to better understand someone else's goals, desires and strengths.  Hard to do on forums or comment sections, but to truly offer value to someone, real conversations need to happen via phone, zoom or ideally in-person.

Do you want to manage people or be a solo-preneur?  Do you understand construction?  Are you highly analytical and introverted or a networker that can't be burdened with the details?  Do you work to live or live to work?

Again, on a forum like this, it depends is the only real answer you may be able to give, because by nature, forums are not conversations.