I’m just starting out.
I’ve been reading like crazy, analyzing deals CONSTANTLY, driving neighborhoods, talking with my real estate agent, meeting with investors currently in my market (and other markets).
But when I talk to my friends and family about investing in Real Estate, it’s always negative and “you can’t” or “you shouldn’t”.
What gives? Why are my friends and family members so against me investing in real estate?!
And, how do I win them over?
They are afraid that you might actually prove them wrong and become successful. They will be watching you even closer so that if you fail or something goes wrong or sadly quit, they will be there to pile on even more negativity. Do not let them steal your dream. Starting out you should probably not let them in on what you are really doing bc when they see your success you won't have to say anything and it will shut them up!!
I think it’s coming from a good place.
But, it can be discouraging when the people you love the most can’t back you.
My mom was the same way, I would tell her when I had a huge month and rather than hear her sing praises of how proud she should be for me all she wanted to know is if I was planning to save money for taxes.
That sounds eerily familiar.
I’ve been getting a lot of. “My dad had a rental and” insert horror story here...
“I just don’t like the idea of all that risk”..
I was talking with my wife about it last night. Incidentally it got brought up in front of a helipad of friends who, as you guessed, are employees without the ambition of a passive income.
Anyways, I told my wife : with all due respect to them, how can I take their advice? They aren’t coming from a place of experience. Only fear. They’ve never analyzed a deal, not read a single book about Real Estate investing, they don’t have the knowledge to give the advice.
I’m a mortgage lender, currently, I spend all day looking at the market and local market in my area. I’m constantly analyzing deals. So it hasn’t taken me very long to line out my criteria and my redline areas.
I think you’re right about not being able to share with them. They don’t understand.
The brain is hardwired to avoid risk at all costs. Fight or flight..
It’s hard to explain to someone like that, if you do your due diligence and vet your tenants properly and stick to your criteria, it takes the “luck” out of it..
Dont worry....we as landlords need renters. If everyone wanted to be an owner and investor, there would be no renters.
Do your friends and family own rental real estate and/or have a long track record of investing in rental real estate?
If yes, then maybe they see something amiss in your plans.
If no (the most likely scenario), then why would you ask for their advice?
Just like any job or sport only a small percentage are successful. People doubt because they haven't took a jump in their life so they'll discourage others. The beauty of REI is if there's a will there's a way. Determination and perseverance pays off. Best of luck, don't be afraid yourself!
Big fat no on that one Mr. Martin.
I would never ask their advice, if I’m being frank.
I’m pretty “ate-up” with it right now. It’s about all I think about, so it comes up in conversation.
I suppose it’s in an effort to seek approval.
I’m looking for that in the wrong place, I’ll just send them all a spreadsheet in a few years showing the difference in my net worth.. I kid.
Thanks Caleb, what part of KC are you in?
@Michael Lowe . I live in Blue Springs but work in MO and KS
Let’s connect, I bought my first house in independence, blue springs schools and sold it a couple of years later for $50k profit.
I love the area, currently in Topeka area.
Unfortunately as you get more involved in real estate you will find some/most of your friends don't share the same goals as you. They may be okay working a W2 job until they are 65 and retiring on their work 401k. This isn't for everybody and not everyone you explain it to will understand no matter how many times you try.
I'd say keep networking and making friends in the real estate space and see where it takes you. It's okay to have friends that don't want to get involved or understand the benefits of investing in real estate. I wouldn't worry about trying to change their mind. Some people are not as tolerant to risk and take more time to come around after seeing some of the success that you will have.
Well put Brett, thanks for saying that.
These things are all becoming more and more clear.
Recently after an argument with my sister-in-law, the teacher, especially.
I tried to explain to her that we are poor, she didn’t agree, but couldn’t list a single asset that made her money. I told her she’s reliant on a paycheck or they lose their house, she said everyone is.
I told her that you don’t have to be! You can make your money work for you.
Unfortunately, I think it’s deeper seeded issues of fear and “financial security” that keep most of us from taking “that leap” and moving towards a life of wealth.
You are lucky to be in Topeka. Its a great! investment market.
- @Curt Davis "..My mom was the same way, ..... all she wanted to know is if I was planning to save money for taxes..."
- I had the same mother, but she retired early as my father had left her a real estate trust that paid about $42k+/year until she passed away @ 90. But I did get nailed once for capital gains tax & had to borrow $18k from her. I had sold a 1/2 share in a condo I had owned for 12 years & then the partner moved in triggering a BIG capital gain & I lost it as a rental deduction.
- Most of those around me told me I was going to lose everything, then I retired very early & kept investing. They plugged away at their hated JOBS until 65 then took demeaning part-time jobs just to get by. My BIL told me years ago I was doing it all wrong & scoffed at us buying more when the 2008 crash came, but he's working 'til 70 to just afford retirement???
- There were some tough, painful, frustrating, frugal years but they fade into the 'been there, done that' memory that we enjoy sharing on BP.
- Go for it....
- PS: I have NO idea why these numeral points appear in my post???
They have industrial agrarian mindset..
Pat, that’s for sharing all of that!
I would try to mimic your numerical bullet points out of jest, but I think it’ll be too cumbersome! lol
It’s amazing how many people scoff at this idea, but work their butt off their entire life!
Somebody told me, “if it was that easy, everyone would be doing it”.
I told them: no, you’re wrong, most people don’t have the guts to do it. That’s why they don’t.
But there’s tons of the “Pat L.”s running around that have retired early because they gave it a shot.
In the words of the famous Wayne Gretzky or Michael Jordan, whichever you’re prefer. I’m pretty sure they both said it.
“You miss 100% of the shots you don’t take”.
I’m gonna be honest with you Hai, I had to google that.
But, I think you’re right.
It’s evident in the argument (mentioned earlier in this thread) with my sister in law (the teacher).
The mindset of everyone plugging along at their 9-5ers that they hate. That mindset keeps people poor.
But, incidentally is also the mindset taught in schools. Whether it’s taught consciously or subconsciously, it’s the mindset that’s praised in the school systems, I think.
Allow me to go dark right away. :)
We all know that we can be better versions of ourselves. More fit, more wealthy, etc. But to become better, we have to exert effort and make sacrifices. Nothing rubs our noses in the fact that we're not making the effort and sacrifices more than having a colleague succeed. To wit, most of us don't want to see our friends and family succeed. At least not significantly more than we have.
On a lighter note, when you do succeed, you'll discover you have many more friends and family than you realized, all with their hands out. I don't discuss my real estate holdings with most of my friends and family. I think this lack of disclosure has only strengthened my relationships. ;)
To that point, that makes me want to succeed even more. Not to rub their noses in it, but to prove them wrong.
And it sounds like you all are on to something, as excited as I am about this new venture and finding the perfect house and growing my net worth.
Some people just flat out don’t want to hear it.
Be it jealousy or worry for you, I’m finding it may be best just to keep my mouth shut and silently prove them wrong.
Depending on your age group, some people still feel burned by the recession and believe another one is due. I get the concern and yes, there are horror stories, but I would turn the conversation to them. It is hard for people to conceptualize 30 years out when they are young. They are only thinking of today and making sure they can pay the bills for tomorrow.
So ask them, "Well, if I don't invest in real estate, and I'm not interested in working a 9-5 job until I'm 80 because social security won't enough, then what do you suggest?" Some might say you should invest in stocks/Roth IRA/401k, which is a great option and encouraged, but they got hit hard too during the recession. What I explained to one of my past clients who does a lot of investing is if you invest in a company and it goes under, then your stock is worth $0 and it can never recover. With a property, even if the place burns down, you still have land value and the property might be insured to get some of your money back. I would argue it is less risky than stocks.
The other point to make is if investing in real estate is so horrible, then how come it consistently ranks in the top 5 industries with the most millionaires?
Just a few thoughts.
No different than when friends or relatives don’t believe you’ll retire early. They look at themselves and don’t understand what you’re doing. Of course, we don’t know you personally, or your track record of following through on things, but if it’s support and approval that you seek, keep reading BP and asking the right questions while you learn and proceed.
BP has your back, even if family doesn’t (for real estate).
Some years ago we partnered with a hard working young woman recently divorced & we acquired some properties together. A few years later her ex (who often told her 'who the hell would ever want you'), could not believe she had become a very successful property owner (& had remarried yet another driven property investor). But, according to her, all it took was that moment of clarity where she realized that NO-ONE but herself alone was going to ensure her future success & it wasn't going to be achieved through the drudgery of a 30yr 9-5 sentence.
Man, Rick, that is SPOT ON!
Unfortunately, we can not rely on our 401ks and ROTH IRAs to support us in retirement.
You just can’t. Myself especially, we’re a single family income of 5. I have 3 kids and it’s my wife and myself.
Some time soon all of those little rug rats are gonna be wanting cars and then going to college.
How do people afford it?!
I’ll tell you how. Crippling debt!
The only real way an average Joe like myself retires (early if I play my cards right) comfortably, is residual income.
I asked someone this series of questions:
1. whats your single biggest asset?
2. How is your wealth calculated?
3. What is the best way to build wealth?
Your house is your best asset.
Your wealth is calculated by your net worth (in my opinion, ok).
If those things are true, then wouldn’t you logically buy more of what has already built your net worth the most??