If you started all over again, what would you do differently?
Zion, IL · Member since 2017 · 60 posts · 35 votes
If you started all over again, what would you do differently?
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Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
8yAvoid all out of state investing. I went to 5 states and they all turned out to be the worst performers in my portfolio. The lost opportunity cost of not using that money to invest locally is incalculable.
Never partner with someone with less experience and money. What a complete waste of time.
Sell off my worst performing properties immediately. Never wait and expect it to get better. It doesn't. Drag them out behind the woodshed and beat them mercilessly into the ground with a big wooden club.
If it doesn't feel right, just don't do it. Your gut is much smarter than your brain. You'll be surprised. Live by, "It isn't the ones I don't buy that hurt me."
Avoid niche properties like condos and senior anything (houses, mobiles, condos). In a good market I will do them, and am doing one now, but in any other market these types of properties just take a ruthless beating and are next to impossible to sell.
Focus on cash flow needs today and get that covered ASAP. I still have a Post-It Note stuck above my desk from my early years that reads, "3 IDEAS to increase income $20 and decrease expenses $20." Do this once a month, especially when looking at the credit card bill. Those $40 gaps in the beginning make a big difference over time. I had another one, long gone now, that said, "$100 net income per month." Every month my goal was to increase my net by at least $100. If I did $150, I did not get $50 credit for next month. If I missed my goal that month, I owed it the next month. Once you meet your monthly nut, every other dollar is an extra point you don't need to win. You've already won and now you're in bragging rights territory.
Focus 1/2 to at least 1 day a week on actively building a private money network. This is what really allowed me to grow my business beyond my yearly goals year after year. With good private money lenders at your back, what you can accomplish will surpass even your craziest dreams. Several years ago I wrote down some wild goals that I thought I'd surely disappoint myself with by December, but by June I was rewriting them because I had knocked 7 of my 10 out already all because of one private lender.
Every December spend some serious time thinking, really thinking about what you want to accomplish over the next 12 months. Put these on paper. I put these on a big white board directly above my desk. I have several paper copies as well. I keep one next to my bed and try to look at it before I go to sleep and once I wake up. I keep another tacked to the wall above the toilet paper in the master bath. As my good friend likes to say, "When I'm stinking, I'm thinking." I have my goals numbered and at the right side of the page a line I can write the date on that I complete the goal.
I could go on and on, but these are some of the habits I picked up along the way which I had in the beginning.
136 Replies
- 8yAnthony GaydenPro MemberRental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votesTaylor Nunn I bought my first two 4-plex properties within 3 months of each other in my first year of investing. I had no clue where to go from there and acquire more properties. It was two years before I bought my next one and another year before number 4. If I could back I would have pushed harder to acquire real estate faster. I backed out of a deal that would have gotten me my third 4-plex property far sooner. I also didn't seriously look at real estate in Omaha for too long after moving there and missed out on opportunities.
- Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes8y
Originally posted by @Taylor Nunn:
Originally posted by @Antoine Martel:
Invest out of state right away instead of waiting. But thats because I live in an expensive city where investing is hard and I spent too much time investing locally. I would also network a lot more. Every week I would be networking.
I apologize for not responding sooner, I didn't get any notifications. I live in the Chicago area, and it's expensive aswell. Are there any particular precautions to take when investing out of state?
I agree networking is very important! I'm trying to ask a new question everyday on the forums and so far it is going well. Have you ever attended any Bigger Pocket events?
I would just say to find the best team on the ground that you can. They will be your biggest asset.
I have not. Have you attended those events before?
- Zion, IL · Member since 2017 · 60 posts · 35 votes8y
Originally posted by @Antoine Martel:
Originally posted by @Taylor Nunn:
Originally posted by @Antoine Martel:
Invest out of state right away instead of waiting. But thats because I live in an expensive city where investing is hard and I spent too much time investing locally. I would also network a lot more. Every week I would be networking.
I apologize for not responding sooner, I didn't get any notifications. I live in the Chicago area, and it's expensive aswell. Are there any particular precautions to take when investing out of state?
I agree networking is very important! I'm trying to ask a new question everyday on the forums and so far it is going well. Have you ever attended any Bigger Pocket events?
I would just say to find the best team on the ground that you can. They will be your biggest asset.
I have not. Have you attended those events before?
No I have not. Im looking to asap! Had an invite to go to the south side of Chicago with someone who was into section 8 housing. I chose not to pursue that though, lol.
- Rental Property Investor · Los Angeles, CA · Member since 2012 · 37 posts · 15 votes8y
I wouldn't buy sfr's. I would buy multifamily with high leverage. 10+ Single family residences are a headache 10 tax bills 10 insurance bills on and on. Much more difficult to leverage than multifamily building's.
Stephen
- Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes8y
Originally posted by @Taylor Nunn:
Aaron, I asked a lot of questions so I truly appreciate you taking the time to answer. You have definitely provided me with a clearer thought process on all the questions I had. These lunches and meetings you speak of; did you find them through bigger pockets?
No. They were around long before BP. Here in SoCal there are lots of opportunities to get out and meet people interested in real estate and I'm not talking about the monthly REIA meetings. There are lots of independent lunches, wine events, etc. The best way to find out about these occasional meetings is to network, network, network. Or, host one yourself! I wanted a great club that had a no sales pitch atmosphere so I started one. It was a lot of work, but when you're the talking head in the front of a room, lots of people to scared or confused how to get into the game eventually just throw their money at you and let you invest it.
Sizzler is the best place to run a monthly or weekly luncheon. Everyone pays their own tab before they sit down. Makes it sooo much easier than separate checks or trying to sort out a bill. Some Sizzlers also have private party rooms. A meeting at a Sizzler was where I bought my first deal. And even though that business has long since shut its doors, it was where I met some investors I still do a lot of business with these days.
- Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes8y
Originally posted by @Ryan Mattson:
@Aaron Mazzrillo Thank you for all the knowledge, you're absolutely right, I can't blame circumstances as a reason for my own shortcomings. Do you have any advice as to approaching private lenders with deals for someone who hasn't yet closed a deal?
Offer them a bigger piece of the pie, but don't let them get greedy.
Be very thorough in your analysis and conservative in your expectations.
Easily the dumbest thing I did. I had a handful of cashflowing rentals a good w2 and not enough self discipline. A few years later I realized it was a waste of cash. Sold it and bought a 4-plex . I get a chuckle whenever I see these 20 somthings in thier jacked up diesel trucks with about 15k in mods in it... That and campers. I swear they have to be the worst use of cash possible. You see the new truck with 30k camper behind it, all I can think is your working until your 70.
- Real Estate Consultant · Texas Hill Country · Member since 2017 · 56 posts · 58 votes8y
"If you started all over again, what would you do differently?"
>> See Nike slogan.
- 8yOwen DashnerPro MemberLender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
If I could do it over again, I would have saved my high school graduation money and bought a 4 plex on an FHA loan at age 18, and house hacked it while going to college and having my buddies pay me rent. Then I would do it again. And again. I would also have gotten my real estate license as soon as possible and aligned myself with the top real estate agents in my area, doing whatever I could for them to learn the ropes. I would do this to learn sales and to make connections.
Then, I would have used those connections to start finding out who the big REI players were in SFR, multifamily, commercial, mobile home parks, etc. I would have relentlessly worked to try and add value to their businesses in exchange for learning more about what made them successful in their niche. If they would let me, I would do work for them for free while learning REI and networking like crazy with successful people in REI and lending.I would also have studied how to become an expert marketer and how to establish systems and processes early on to maximize efficiency and get off-market deal flow coming in like clockwork.
I would also have been a lot better about mapping out my goals, both short and long term.
Oh, I also would have started Biggerpockets before Josh Dorkin did. - Investor · Miami, FL · Member since 2015 · 363 posts · 143 votes8y
@Taylor Nunn , If I could start over again, I would jump on investing younger, I would go to the REIAS, I would not be a good Realtor for so long without learning to invest, I would partner with a lot of my clients to split profits on their acquisitions
Take charge of what you do. Even if you are in the most expensive areas the rewards are way higher. GO after the ones with most return not to be slum lords nickel and dime every low housing.....
Open IRA for your children as soon as they have FICA number etc.
- Fishers, IN · Member since 2017 · 7 posts · 5 votes8y
Originally posted by @Chris Jensen:
@Taylor Nunn if I could start over, I would never EVER buy turn-key or move-in ready rental properties even if they cash flow well. That's what we did with our single family houses. We bought in a high-demand area and as such never struggle to rent them out. And they cash flow very well. But I have a lot of my own money trapped in the equity in those homes. This is a fine option for the wealthy 1% and such, but for the rest of us 99% all it takes is buying a few properties like this and we're done. Our money is consumed in the downpayments, and that's the end of our REI path.
If I could do it all again, a) I would use the BRRRR approach over and over to maximize my available investing funds, and b) I wouldn't mess around with single family rentals but focus instead on commercial multi family.
Hope there's a nugget or two in there. Best of luck!
That is awesome advice, thank you!
- Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes8y
1. Know my strengths and focus on them.
2. Build a good team first, then go find the property. Good teams outweigh what market.
3. House hack A-class duplex or up.
4. Only buy in A/B+ areas with built in equity and a value add opportunity.
5. Use a PM or pay someone to lease up the property.
6. Get 3 units using leverage, then snowball the debt to set a solid foundation.
7. Have $10,000 in reserves per property.
8. Keep building the dividend stock portfolio in the background.
9. Don't go too fast, after a few your strategy shifts and becomes more focused.
10. Save, but don't forget to reward yourself to stay motivated.
- Zion, IL · Member since 2017 · 60 posts · 35 votes8y
Originally posted by @Owen Dashner:
If I could do it over again, I would have saved my high school graduation money and bought a 4 plex on an FHA loan at age 18, and house hacked it while going to college and having my buddies pay me rent. Then I would do it again. And again. I would also have gotten my real estate license as soon as possible and aligned myself with the top real estate agents in my area, doing whatever I could for them to learn the ropes. I would do this to learn sales and to make connections.
Then, I would have used those connections to start finding out who the big REI players were in SFR, multifamily, commercial, mobile home parks, etc. I would have relentlessly worked to try and add value to their businesses in exchange for learning more about what made them successful in their niche. If they would let me, I would do work for them for free while learning REI and networking like crazy with successful people in REI and lending.I would also have studied how to become an expert marketer and how to establish systems and processes early on to maximize efficiency and get off-market deal flow coming in like clockwork.
I would also have been a lot better about mapping out my goals, both short and long term.
Oh, I also would have started Biggerpockets before Josh Dorkin did.Thank you for sharing your knowledge! This has definitely given me a much clearer thought process on which direction I want to go. I've been questioning on whether or not to obtain my RE license, and now I'm convinced that it is something worth pursuing.
Did you go to college, and if so, what for? Did you find it beneficial to you and worth your time?
- Zion, IL · Member since 2017 · 60 posts · 35 votes8y
Originally posted by @Sam Shueh:
Take charge of what you do. Even if you are in the most expensive areas the rewards are way higher. GO after the ones with most return not to be slum lords nickel and dime every low housing.....
Open IRA for your children as soon as they have FICA number etc.
Thank You! I'm in the Chicago area, and a neighborhood that's not so good at the moment, but am also surrounded by very expensive neighborhoods that are 20-30min away.
I love that you kept your children in mind, although I don't have any now, i do think about their future lives regularly!
- Zion, IL · Member since 2017 · 60 posts · 35 votes8y
Originally posted by @Peter B.:
Easily the dumbest thing I did. I had a handful of cashflowing rentals a good w2 and not enough self discipline. A few years later I realized it was a waste of cash. Sold it and bought a 4-plex . I get a chuckle whenever I see these 20 somthings in thier jacked up diesel trucks with about 15k in mods in it... That and campers. I swear they have to be the worst use of cash possible. You see the new truck with 30k camper behind it, all I can think is your working until your 70.
I completely agree, Peter! I'm happy to hear I'm not the only one who made that stupid, costly mistake. Glad we can relate
- Zion, IL · Member since 2017 · 60 posts · 35 votes8y
Originally posted by @William S.:
1. Know my strengths and focus on them.
2. Build a good team first, then go find the property. Good teams outweigh what market.
3. House hack A-class duplex or up.
4. Only buy in A/B+ areas with built in equity and a value add opportunity.
5. Use a PM or pay someone to lease up the property.
6. Get 3 units using leverage, then snowball the debt to set a solid foundation.
7. Have $10,000 in reserves per property.
8. Keep building the dividend stock portfolio in the background.
9. Don't go too fast, after a few your strategy shifts and becomes more focused.
10. Save, but don't forget to reward yourself to stay motivated.
All great, valuable points! Thank you. I definitely took a screen shot.
What do you mean by, "snowball the debt to set a solid foundation"?
- Rental Property Investor · Overland Park, KS · Member since 2015 · 492 posts · 234 votes8y
Take cash flow from all three properties + savings and payoff each mortgage.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Aaron Mazzrillo your on fire dude Preach it.
biggest boo boo I see those starting out is thinking that the money should be happy to work with them and they should get the bigger slice of the pie... very short sided thinking you see that on BP all the time.. folks trying to do their first deals, others getting on her telling them they are crazy money is charging to much etc etc.. they never get anywhere .. I to this day after 40 plus years.. Still pay the money more than I take.. other than maybe a 50/50 sometimes..
My to do it all over was to realize what a freaking gold mine I had in the timber run from 92 to 97.. If I would have buckled down moved to Oregon instead of hanging half the year in Napa.. I probably could have retired on what I could have made in that insance log market.. but no my partner and I we would hit a killer deal and off to Maui he went and I stayed in Napa drinking wine flying my plane ( not at the same time) and playing golf LOL>
and way back when..when I first got into business I grew up in Cupertino I would have learned more about the computer and networking business got on in the first year with Apple been a salesmen and been long retired on stock options.. but I know this is a real estate forum.. So I guess that don't count.
- Investor · Scottsdale, AZ · Member since 2016 · 6 posts · 4 votes8yI would definitely use leverage and refinancing much more prolifically than I did. I was wrongly obsessed with appreciation and mortgage paydown, therefore I wasn’t using brrrr nor was I using the power of leverage to obtain brrrr opportunities.
Originally posted by @Aaron Mazzrillo:
Originally posted by @Taylor Nunn:
Aaron, I asked a lot of questions so I truly appreciate you taking the time to answer. You have definitely provided me with a clearer thought process on all the questions I had. These lunches and meetings you speak of; did you find them through bigger pockets?
No. They were around long before BP. Here in SoCal there are lots of opportunities to get out and meet people interested in real estate and I'm not talking about the monthly REIA meetings. There are lots of independent lunches, wine events, etc. The best way to find out about these occasional meetings is to network, network, network. Or, host one yourself! I wanted a great club that had a no sales pitch atmosphere so I started one. It was a lot of work, but when you're the talking head in the front of a room, lots of people to scared or confused how to get into the game eventually just throw their money at you and let you invest it.
Sizzler is the best place to run a monthly or weekly luncheon. Everyone pays their own tab before they sit down. Makes it sooo much easier than separate checks or trying to sort out a bill. Some Sizzlers also have private party rooms. A meeting at a Sizzler was where I bought my first deal. And even though that business has long since shut its doors, it was where I met some investors I still do a lot of business with these days.
You are awesome. Where the hell did the Sizzlers go in LA? Mines a Chase Bank. I get your point still:)
- Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes8y
I wish I'd consistently spend an hour a day on BP. Even knowing this I find I still fall short of this mark frequently.
- 8yDaniel HymanBusiness MemberCPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votesI would have house hacked as a way of learning the business and stocking up capital for another investment...before I got married and had a bunch of kids.
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