90% of Bigger Pockets will never take action on REI
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesthe easiest thing to get into and understand is the Vanilla transaction IE buying rental property.. everyone can understand it and it is a VERY VERY simple concept.. buy a property rent it out.... end of mental math.
choosing wisely is important of course.
but basically there is so much more to real estate than owning a rental.. and much of it quite a bit more profitable than rentals as well.
Some people just don't want to be landlords... ergo you have people that invest in debt.. and COC debt is usually more profitable than rentals with quite a bit less hassle.
there is development deals for the more sophisticated.
there is flipping
there is new construction.
Timeshares.
Timber
mortgage industry
Guru / Trainer
Mobilehome parks
Tiny homes ( new thingee that is getting some speed)
Land business recreational and path of progress
courthouse steps buying and reselling
Tax sales/ pre and post
on and on and on... so just because someone does not want to do the most simple transaction out there and the one that takes the least amount of thinking to understand the concept.. does not mean they won't do something else in and around real estate
78 Replies
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes8y
Originally posted by @Timothy J.:
False I signed up 3 years ago and did one flip now looking for rentals. Purely anecdotal evidence.
Just because you took action doesn't mean that others do.
I've always said that 99% of wanna-be-investors never do anything. So, obviously 90% is a more optimistic view ;-)
Heck, I know someone that for 10 years has attended every seminar and subgroup in Atlanta and calls herself an investor, but she's never done a deal . I really don't have the patience for those people.
This is a great list, but I thought I should add REIT's and syndications, as passive vehicles for participating in just about any sector of real estate, such as multi-family commercial, offices, self-storage, senior housing and land development. It's entirely possible to remain completely hands-off as a RE investor!
- Secaucus, NJ · Member since 2014 · 32 posts · 7 votes8yMichaela G. Maybe you are right, but at one point I was in the 90% statistic - now I’m not. Probably similar to others here. However since RE is capital-intensive I would guess that the Pareto Principle (80/20 rule) is probably in effect. No surprise there! I would be more interested in reading about the background / capital of those who repeatedly take action vs those who don’t (e.g. do they have family in RE? Over $100k ready to deploy at any given point in time, etc.? Degree in RE?) and what are the differentiating factors.
- Orlando, FL · Member since 2017 · 35 posts · 10 votes8yI think it’s the initial obstacles of funding, and just the fact that it’s extremely intimidating risking a large amount of your own money much less a large amount of other people’s money. It can be an intimidating business.
- Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes8yBP has a lot of noise and therefore it is a little overwhelming to get started. Compound that with the fact that there is a lot of hating on mentorship programs... which I agree there are a lot of bad “run to the back of the room” ones. Here is what I tell people. If you are ok getting the 8-10% in the corrupt stock market and mutual funds them cool. But if you are willing to invest a year or so to learn then you can grow your money at 20-30% a year and live differently.
There are soo many steps from "I want to be a real estate investor" to actually buying an investment property.
The majority of people have huge gaps in knowledge, funding, or risk tolerance. BP can fill some of these gaps. Mentors can fill some of these gap.
In the end, it usually takes growing your knowledge, savings, network, and risk tolerance. These are all difficult areas to grow in, so most people never reach the tipping point.
Originally posted by @Daniel F. Harb:
Hello, @Terry Lao, Happy Thanksgiving to you and your wife. :)
1% at the Bank? You mean .001%. Nothing like making $1.00 and 13 cents on your 10 grand in the Bank. Yikes!
Real Estate for wealth creation, for sure.
Best of profit to you! $$$
You should look into online high yield saving accounts. I moved most of my money from Wells Fargo to Ally Bank savings account for the 1.25% interest instead of next to nil percent. There are other banks that offer more at 1.3%ish if you look around.
@Brian Pulaski that's an interesting perspective. Flipping seems to have much more risk than being a landlord, but of course people are more comfortable with what they're good at.
- ARRT, RT(R) / Rental Property Investor · Newport Beach, CA · Member since 2017 · 360 posts · 242 votes8y
Thank you, Hau N. Very kind of you. 98% of my money is in Index Funds ( S&P & Dow Jones Total Stock Mkt.) Charles Schwab has the absolute lowest fees in the industry. I was kidding about the abysmal savings rates. I NEVER keep more than a small amount of cash in a local bank. I can easily pull money out of any of my index funds to buy RE instantly.
Index funds... The way to go!
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes8y
I think it has to do with expectations. People watch the TV shows or the late night commercials about people hitting it big in real estate with no money and no work. That just isn't reality. So they come in with the attitude that anyone can get rich and get their dreams squashed when they realize it is work.
REI is a lifestyle, it can be 24/7 and takes sacrifices. 6 years in I believe the sacrifices are well worth it, but it is never going to be handed to you.
Second City Real Estate4.821 Reviews - Flipper/Rehabber · Dallas, TX · Member since 2016 · 26 posts · 3 votes8y
The hardest deal in Real Estate is the first one. I wanted to do RE for years but simply had no idea of where to get started. I started only because I paid WAY too much money to a local RE Investor's Mentorship in DFW. $8K! Yuck. Although I definitely don't think that it was worth anywhere near that much money, I do have to concede that I don't know if I ever would have had enough courage to do my first deal had I not had someone there to hold my hand. You never feel like you have enough information. Now I look back and say to myself, wow, those were some awful deals that they served up to us that only a naive fool would invest in! And I'm right. I was that naive fool. Yet I learned a ton from that experience and am definitely reaping the financial benefits today since I simply decided to finally take action.
By the way, this almost reads like a subtle advertisement for one of those paid investor mentorship. I promise you, I don't work for any of them and would suggest new investors do NOT pay some company a whole bunch of money like that to get started. I could have learned everything that I needed to know on BP and by going to local RE networking events. But you live and you learn...
- Morgantown, WV · Member since 2017 · 17 posts · 0 votes8y
Cannot speak much to BP members, as I am New here myself, but generally most people hesitate and Thank The Heavens above that they do.
For many, many years, We made a living buying and selling at auctions, Antique, Durable Goods, Some Properties.....This was about the time Ebay had started. We are old folks.
I noticed, while we were buying and active on way too many deals, There were others who attended auctions, .....well ... I am not certain...But Maybe Just to be there???
They never bid, or bought anything. I would watch them leave, while we were calling for our partners to bring more transport to the site.
We were volume dealers and could sell just about anything. We avoided the hotly contested specialty items, as those items usually ended up going for far too much (Bid Wars). Odd observation, but generally holds true, so I would expect that BP, would not vary much.....75-80% (Our guess) but 90% might be accurate.
I learned to appreciate those folks over time..Many times, We sold the items right there to folks that were at the same sale for a small mark-up (Or a larger one)??? We guess we got paid for our ability to see the Value of a $20 Bill be offered in exchange for a $1 Dollar bill.
Had a Sales manager try that " Close" early in my education in Sales.......Over time ( and I am still shocked when it happens) I realized that there are some people, who would not Give a $1 Bill for a $20...a $100 or other amount. It used to frustrate me, Now.. I am just Thankful they are around, and hope they breed more and faster!!! - Waukegan, IL · Member since 2017 · 24 posts · 9 votes8y
Originally posted by @Stan Hill:
Originally posted by @Rachel Murphy:
Originally posted by @Christine Kankowski:
Its jus so much easier to invest in a mutual fund... no real learning to the extent that property does.
I agree, so many think its a great idea, but there are a lot of hurdles to jump over. Loans, money, repairs , inspections, flipping, agents, property managers, tenants.
What is a mutual fund?
A mutual fund is an investment vehicle where investment companies, such as Vanguard, Fidelity and others pool resources from many investors and invest that pool of funds into particular investments. Quite often they invest in stocks, though can invest in bonds and even real estate ventures. They typically have a particular strategy, such as municipal bonds, large cap stocks, small cap stocks, certain sectors of business, etc.
Thank you for explaining that to me! How effective is this? Wouldn't they be better off with less investors? Less people to share profit with, right?
Originally posted by @Rachel Murphy:
Originally posted by @Stan Hill:
Originally posted by @Rachel Murphy:
Originally posted by @Christine Kankowski:
Its jus so much easier to invest in a mutual fund... no real learning to the extent that property does.
I agree, so many think its a great idea, but there are a lot of hurdles to jump over. Loans, money, repairs , inspections, flipping, agents, property managers, tenants.
What is a mutual fund?
A mutual fund is an investment vehicle where investment companies, such as Vanguard, Fidelity and others pool resources from many investors and invest that pool of funds into particular investments. Quite often they invest in stocks, though can invest in bonds and even real estate ventures. They typically have a particular strategy, such as municipal bonds, large cap stocks, small cap stocks, certain sectors of business, etc.
Thank you for explaining that to me! How effective is this? Wouldn't they be better off with less investors? Less people to share profit with, right?
Some mutual funds become so large, they do in fact have too much money to be nimble enough to make a good return. Also, I'm almost certain most targeted mutual funds don't even do as well as investing in index funds, which are mutual funds that invest in the overall stock market.
- Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes8y
Entrepreneurship is a mindset and requires a certain attitude. Not everyone is predisposed to it. I once attended a "rich dad, poor dad 3-day boot camp". A very large portion of the content was tantamount to motivational speaking. At first, I didn't realize why they were trying to motivate people, who had paid money ($500) to come to this seminar. During the breaks, I talked to some attendees and realized that many were not quite ready to start. I had owned rentals for over 10 years and was more interested in getting clarification on other Real estate Strategies. After the boot camp, I kept in touch with a few attendees. Less than 25% have completed a deal so far. Many are still thinking about it or finding various reasons not to get started.
- 8yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
To be honest, I had no idea that such a small percentage of people on BiggerPockets actually invested. I thought that the percentage was a lot higher. Then it makes me think, why are so many people commenting and giving their 2 cents on investing if they don’t have experience?
I wonder if there is a pattern that can be found among the responses of experienced investors (let’s say 20 or more deals) intermediate investors (5-20 deals) and beginning investors 0-5 deals).
I notice that when I have a differing opinion than someone else, I look at their profile to see how many deals they have done. If I see that they have done a lot more deals than I have, then I really think about and consider what they are saying. But if they have not done a deal or have only done a handful of deals, then I think to myself that makes sense why our opinions are so different - they have only done a few deals.
That may come across as arrogant. But when it comes to real estate investing, I am not interested in adopting the mindset of those less successful than me. I want to learn from and adopt the mindset of those who are much more successful than me. I am just happy that BiggerPockets includes that question ( how many deals have you done) on the profile. It helps me know the expertise of the person commenting. And anyone who doesn’t have their profile filled out, I don’t really trust their opinions because I don’t know the source by which it comes.
Originally posted by @Michaela G.:
Heck, I know someone that for 10 years has attended every seminar and subgroup in Atlanta and calls herself an investor, but she's never done a deal . I really don't have the patience for those people.
Wow....I always assumed that the ones who never take action lose interest after a few months. But ten years? Does anyone ever point out to her the folks who started years after her and have been successful? That's even long enough to be able to say you've been through a downturn. Not many here on BP can say that.
- Austin, TX · Member since 2017 · 145 posts · 24 votes8y
id go even further and say 90% of that 10% who tried / took action their first year, failed, and then quit the second year
- Cape Coral, FL · Member since 2008 · 469 posts · 32 votes8y
I'd guess it's just the rule in general with any road to success. This could be a thread in any forum.
- Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes8y
Biggerpockets is a community of over 275,000 members (according to biggerpockets.com). 10% would be 27,500k members. I'm not surprised at all.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes8y
Originally posted by @Anthony Gayden:
90% will not take action. Of the 10% who do take action, the grand majority will only do one deal. Only 1% will ever do 4 or more deals.
This isn't a bad thing, it's just a fact of life in every skill, job, or profession. There are very few people who take the steps necessary to reach their goals. There are also masses of people who only go so far.
Very true.
A lot of people start businesses and then fail. REI or otherwise.... Fact of life. Some adjust (improve) and eventually succeed, but the landscape is littered with those who didn't. And think about it... we've been in one of the longest real estate/stock/economic recovery scenarios we've seen in a generation. Time will tell, but I've seen (and survived) the Great Recession. I'd content that 95%-99% of BP Nation hasn't and couldn't.
Hindsight is 20-20. If one invested in any one the below cities, would appreciated to some extent, and some more than others.
Terry
Metropolitan Area Zillow Home Annual Annual Annual Zillow Annual Value Indexiv ZHVI ZHVI Inventory Rent ZRI (ZHVI) Change (%) Change ($) Change Index Change (ZRI) United States $203,400 6.50% $12,500 -11.70% $1,432 2.20% New York, NY $426,100 7.10% $28,200 -16.80% $2,393 0.50% Los Angeles-Long Beach-Anaheim, CA $615,800 5.40% $31,600 -23.20% $2,720 4.40% Chicago, IL $212,900 5.30% $10,800 -9.30% $1,651 1.00% Dallas-Fort Worth, TX $217,100 9.10% $18,100 28.40% $1,596 3.00% Philadelphia, PA $219,000 3.00% $ 6,400 -16.10% $1,578 0.40% Houston, TX $183,300 4.60% $ 8,000 2.80% $1,532 -2.00% Washington, DC $384,700 2.40% $ 9,000 -10.70% $2,133 0.70% Miami-Fort Lauderdale, FL $259,200 6.80% $16,400 -0.90% $1,848 -1.50% Atlanta, GA $182,200 6.70% $11,400 -11.60% $1,379 4.30% Boston, MA $432,300 6.50% $26,400 -19.10% $2,365 2.20% San Francisco, CA $871,300 6.00% $49,500 -32.00% $3,379 -0.10% Detroit, MI $142,700 7.60% $10,100 -16.90% $1,181 1.40% Riverside, CA $335,200 6.00% $19,100 -20.00% $1,840 6.20% Phoenix, AZ $242,100 6.50% $14,800 -12.60% $1,344 3.70% Seattle, WA $457,700 11.70% $48,100 -23.60% $2,198 5.60% Minneapolis-St Paul, MN $246,200 5.50% $12,800 -18.40% $1,623 5.30% San Diego, CA $555,800 6.20% $32,500 -31.00% $2,535 4.40% Tampa, FL $189,100 8.10% $14,100 -20.10% $1,364 2.30% Baltimore, MD $262,000 3.10% $ 8,000 -18.80% $1,730 0.20% Denver, CO $372,800 6.30% $22,000 -23.30% $2,035 1.80% Pittsburgh, PA $137,100 3.90% $ 5,100 -10.00% $1,067 -1.50% Portland, OR $369,000 6.00% $20,900 3.40% $1,872 4.70% Charlotte, NC $179,100 8.50% $14,000 -4.80% $1,284 3.60% Sacramento, CA $376,900 8.40% $29,100 -21.80% $1,813 7.00% San Antonio, TX $167,100 7.50% $11,700 3.70% $1,335 1.00% Orlando, FL $209,900 7.70% $15,000 -14.90% N/A N/A Cincinnati, OH $154,600 5.50% $ 8,100 -16.00% $1,273 2.90% Las Vegas, NV $236,800 11.20% $23,900 -24.50% $1,284 3.90% Columbus, OH $168,400 6.90% $10,800 -25.50% $1,324 2.70% San Jose, CA $1,076,400 12.30% $118,200 -60.40% $3,488 0.10% Austin, TX $280,700 8.50% $21,900 4.40% $1,690 -0.60% Virginia Beach, VA $222,300 2.50% $ 5,400 -4.80% $1,400 0.70% Providence, RI $273,300 6.20% $16,000 -13.90% N/A N/A Milwaukee, WI $214,900 3.70% $ 7,700 -4.30% N/A N/A Jacksonville, FL $184,800 6.80% $11,800 -6.50% N/A N/A - Flipper/Rehabber · Wichita, KS · Member since 2017 · 152 posts · 119 votes8y
At the end of the day REI are business owners. By nature business owners scream independence and thrive on the chase. At the end of the day the 10% taking action hopped in the drivers seat, the 90% that didn't are just along for the ride and enjoying the scenery.
- Cornwall on the hudson NY · Member since 2017 · 1 post · 1 vote8y
I agree many wont jump at opportunity when it is there. However i myself am definitely eager to get into the whole real estate investment. Mentally ready yes, financially is where i struggle not to mention the knowledge of dealing with Hard money lenders, contracts, sellers, buyers, construction in general. I am however looking forward over the next few weeks to get into some meet ups or even auctions. Not to buy anything but to network and get to know those in the industry. But mostly it comes down to knowledge and comfort of that knowledge is what im finding is the biggest issue. Been browsing on here watching videos, webinars, and just now trying to network out with people in the industry. Its a comfort barrier for myself as this has been a whole world unknown to me but its exciting and has been for a long time. I just always assumed i wasn't in the position to get involved in the last month and a half i realized forget waiting till im "in the position to be involved". Just network get the knowledge and talk to those involved whats the worst that can happen on such an adventure in itself?
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes8y
@terry lao.....those numbers are all just averages that don't ever give the real picture that you see when you're in the trenches.
E.g. in my neighborhood in Atlanta the values have gone up about 50% in the past year and rents about 20%. That's different from the overall Atlanta picture you see long distance.
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