90% of Bigger Pockets will never take action on REI
Most Popular Reply
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
- Waukegan, IL · Member since 2017 · 24 posts · 9 votes8y
Originally posted by @Stan Hill:
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.
How does a fund get so big that the investors can't make money? Aren't mutual funds managed by someone experienced? Why would someone even invest in mutual funds if they don't have a very high return rate? Are there any benefits to it?
- Terry Lao Not everyone has an equal opportunity. BP is where you start research, that stage, you find out that you are in a situation where you don’t have any money, no opms, average credit score, and no history will not get you anywhere, then reality will sink to you that you wont get in the door. Then you start to get desperate and start to explore working for somebody who is doing it, to learn the ropes, then you find out that they are hard to find and if you do, they find you to be their future competition. You get more desperate and plan to do some bird dog or drive for dollars then find out that it’s not worth the time you spent. For those who have given their all and live and breathe real estate, and if they don’t drop out and spend time 40 hrs a week for 4 months doing research in RE, hitting 100 roadblocks and finding a solution around it, they might succeed. For those who only think, they are bound to fail. So I think the 90% is inaccurate, you can’t count them to be a RE-wanna be if they are only researching and not even spending 8 hrs a week to do RE. They’re looking for an expensive hobby, they aren’t anything close to becoming an investor. It’s like counting how many 10 year olds that want to become a doctor. By the time they are 16, that count has no connection at all.
The 90% figure came from one of Brandon Turner's podcast. Yes, Brandon of Bigger Pockets.
Hey Brandon, your 90% is wrong.
Terry
- _ · Member since 2017 · 41 posts · 10 votes8yI’m a 21 year old college student and part time worker. I recently got interested in real estate investments. But, to say that 90% of people on here won’t take action, you have to understand that not everyone can take a lose easily. It impacts an older person more than a younger one, it just does for X factors. Why are they worried about who’s taking action or not? Take action 👍
- Here is what a brainiac says about the matter:
Originally posted by @Rachel Murphy:
Originally posted by @Stan Hill:
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.
How does a fund get so big that the investors can't make money? Aren't mutual funds managed by someone experienced? Why would someone even invest in mutual funds if they don't have a very high return rate? Are there any benefits to it?
Research shows that the average number of best idea stocks is 20 or fewer. As fund assets under management (AUM) grow, it becomes increasingly difficult to find enough high-quality stocks that both meet the original investment criteria and have enough liquidity to satisfy the growing fund size."
Since mutual funds often specialize in certain sectors, they can run out of "best picks". Many if not most employer retirement plans often mutual funds as investment choices. Choose wisely.
At first, 90% seems high, but it is a statistic that Brandon Turner said on one of his podcast. This is his website, so I would have to take his word.
Now, there is an enormous barrier to entry to purchase any real estate. One, the down payment is not something everyone can come up with. Two, if down payment, then you are qualifying for a loan. Loans are not easy, as you need good job, fico score/credit history, savings history, etc. Third, property needs to be in good condition or lender will not give loan. Appraisal needs to come back at equal or above purchase price.
The home is the largest purchase one can make in their lifetime. If it were a car, or candy bar, then everyone would be doing it.
Terry
- 8yShawn AckermanPro MemberReal Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
With all of the avenues in real estate one can take, it baffles me that not more people are investing. Have I had losses? Sure. Have I had gains? Sure. As with any investment there will be both, hopefully lol!! But in all honesty I think that so many people have been conditioned into believing working a 9-5 and living a "safe" life is the way to go. Investing in stocks just make no sense to me, at all......Bitcoin on the other hand LOL!!! I'll leave that for another discussion. Great post and thread guys. Keep it going.
- Investor · LOUISVILLE, KY · Member since 2013 · 299 posts · 137 votes8y
Originally posted by @PeTika T.:
For me, I have a strong desire to get started and have been ...
Make him an offer. Send the offer to him.
You are taking the right steps with networking, education, knowledge, etc. Take it one more step, see link below.
Terry
- Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes8y
My school of thought:
1. People need to RESPECT THE BUSINESS - Most people (now I am just generalizing, this does not apply to everyone) believe that buying real estate will make them rich. They see the glamour part of it because that's what's plastered all over the internet in the form of advertisements. What some fail to do is to respect the business by taking the time to learn about it. As @Jay Hinrichs mentioned, there are various forms of investing, all of which need TIME to better understand and need to be evaluated thoroughly.
2. It's good to sign up to a real estate web site and gain knowledge BUT reading and signing up for Bigger Pockets can only prepare you so much. My opinion is that you should speak to those who are successfully investors, preferably in person. Constantly being in an environment with those who have "walked the walk" will do wonders for you because THAT will give you first hand experience and get you one step closer to your end goals.
Now are there other ways to "skin the cat" that I haven't mentioned, absolutely so again just my 2 cents on a very general level.
- Waukegan, IL · Member since 2017 · 24 posts · 9 votes8y
Originally posted by @Stan Hill:
Originally posted by @Rachel Murphy:
Originally posted by @Stan Hill:
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.
How does a fund get so big that the investors can't make money? Aren't mutual funds managed by someone experienced? Why would someone even invest in mutual funds if they don't have a very high return rate? Are there any benefits to it?
Here is what a brainiac says about the matter:
Research shows that the average number of best idea stocks is 20 or fewer. As fund assets under management (AUM) grow, it becomes increasingly difficult to find enough high-quality stocks that both meet the original investment criteria and have enough liquidity to satisfy the growing fund size."
Since mutual funds often specialize in certain sectors, they can run out of "best picks". Many if not most employer retirement plans often mutual funds as investment choices. Choose wisely.
Thank you so much for all of the information you have provided me. I truly appreciate you taking time to explain these things to me. I do not know much about stocks and have been enjoying learning more about them.
Some people are exploring the REI world and taking advantage of BP to learn something about the business and may decide it's not for them, at least at where they are in their lives currently. Fifteen years ago, I had interest in opening a bakery. I joined and visited a number of websites dedicated to the trade and subscribed to a trade magazine or two. Ultimately I decided it wasn't what I wanted to do.
Not sure why so many people seem to think that not investing in real estate is a character flaw -- lazy, fearful, etc.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes8y
phil ganz...looks like you're an agent and are only looking for customers and aren't here to become an investor. So how do you think you can judge. Do you feel offended because the terms fearful or lazy fit on you?
The fact is that most people back our because they're fearful or simply don't want to do the work that's involved. I haven't seen anyone write that there's something wrong with those people.
It looks as if this hit a nerve for yoy.
90% of Bigger Pockets will never take action on REI................is a statement I heard on podcast from Brandon Turner, of Bigger Pockets. You can believe or not believe Brandon's statement. I think it is a high number but when you think about it logically, there is a high barrier to entry.
1. High cost of down payment - could be 50k or more in some markets
2. Not familiar of the process to find property and then follow to close
3. Decided to rent rather than purchase
Home ownership or investment is not for everyone.
Terry
Originally posted by @Justin Folkins:
The response of “I don’t want to be a landlord now” is more of an excuse in my opinion. If done correctly successful and wealthy investors understand the importance of a good property manager. When in place, you the landlord collects the checks and ever now and then advise the manager on what you want done.
It's a lifestyle choice, not an excuse. I have a great PM and a "easy" rental.... but it's still required me to make decisions and cost me money. There are plenty of other ways to invest that'd remove that responsibility..... Take mutual funds for example, I put money in, get money back. If the company does something good/bad I really have no input (barring oddball exceptions) and it's not likely to cost me extra (outside of the fees I already knew about). It's not like a rental where I have to decide to drop rent because of extended vacancy or to make repair now/later, move fwd with eviction etc...
- Lake Oswego, OR · Member since 2015 · 174 posts · 115 votes8y
REI will not always align with who you are - spirit, heart, abilities, personality, experience, goals, and time.
I get looking at obstacles and thinking "how can I?" but at the end of the day people have different gifts and values that will set them on different courses. And that's ok. Our best way of living and investing isn't going to be the universal best for everyone.
I am a newbie who has taken action in 2017. REI has challenged and grown me more than any experience of my life, and now that I've entered the game I plan to play it 'til I die!
- Kyparissia, Messinia · Member since 2017 · 94 posts · 43 votes8y
There are 2 things that are keeping us from investing at the moment. The first is that since we live abroad, we not only have to save for a down payment... but all of the amount- it takes longer. The second is a family issue (wedding coming up) that has to be taken care of first. Sometimes life gets in the way.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes8y
@Terry Lao the reality is real estate is risky and most don't want to take the risk or take the time to learn to mitigate that risk.
I agree with the 10% number (it may even be less) but that is not necessarily a bad thing. Many people are not cut out to be real estate investors or business people. i believe just about everybody is capable of doing real estate. That is not the same as it being well suited for real estate.
- Real Estate Agent · Queens Village, NY · Member since 2017 · 91 posts · 57 votes8y
Past week and a half; been handwriting letters. Sent out some last week, some this past Tuesday. Got my first call today; caller wasn't interested in selling. She did say she has a friend interested in selling and may give my # to said friend. I'm nervous and exhilarated lol. See where this takes me...
I understand the risk element, and not everyone has high tolerance. Therefore, stick to the .1 or 1% return from the financial institutions offer.
However, the subject of my post was 90% of Bigger Pockets people who listen to podcast, ask questions, and are basically informed, don't make the purchase.
The 90% is from Brandon himself. It is not a number that I made up.
Terry
- 8yDave Van HornPro MemberFund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
@Terry Lao I agree with Ned. In my 30+ year career I've seen more people decide not to do the business or fail and not try to get back up again, than I have seen succeed. It's certainly not for everyone.
For one thing, I think that's because success is hard. It's the same reason you see so few businesses last. I remember reading a stat from Inc. Magazine that once said only 4 out of 100 businesses pass the 10 year mark. It's tough to do that, to not only put in the day-to-day work but also to adapt to an ever changing marketplace to survive. So I don't think everyone is at that point where they can handle that amount of difficulty, but I do think we all need to keep trying to help people get there.
Also, success is not only difficult, but to some degree it's also not entirely in our control. Or rather the magnitude of success isn't. Just like cooking, timing can be everything in this business (as is location). I wouldn't be the first to say that I wish I had bought properties in certain places at certain times (or held them), but no one has that crystal ball. I've never been fortunate enough to experience overnight success but with many years of experience, I can tell you one thing's for sure:
Real Estate is a versatile vehicle that you can work with in any market. Not only is it collateral based but it's a hedge against inflation. So you put in the time, the work, and the energy and after awhile serious success will follow.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes8y
@Terry Lao I was going to reply again but Dave covered it better than I could.
@Dave Van Horn It has taken me 14 years to become an overnight success.
- Saint Cloud, MN · Member since 2017 · 90 posts · 70 votes8y
In regards to success, there are numerous variables why or why not one is successful at something.
Whether it be real estate, YouTube videos, owning a restaurant, or running a marathon: two common traits I've noticed in successful individuals is that they are persistent and determined.
Certainly there are cases people are highly successful at something very quickly, but those are outliers.
Most people who are successful at something are successful because of their determination and persistence to be successful.
Usually, when one works towards a goal their success is slower than they wish; the effort to be successful takes more time than they wish; and initial results are usually lower than they wish.
However, successful people keep putting in the hard work. They are persistent.
I think many people never buy their first rental because the initial learning and searching phase takes work.
Many of those who do buy their first property probably never grow beyond a few because they may not have the determination.
Persistence and determination are incredibly important in regards to being successful.
- 8yDave Van HornPro MemberFund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
@Ned Carey Not bad, it's only taken me 30! haha
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