Best/worst advice you’ve gotten as a new investor ?

41 Replies

Originally posted by @Christine Sierra :

@Matt M.

It seems all the bad advice seems to come from the ones you love and those closest to you.

My mother said the same when we purchased our first home!

Mine too. My father said I was too busy to manage my only rental and advised me to sell it a year later for the same price I paid for it. Eight years later it is worth 2.5 times what I paid for it. He claims he doesn't remember ever saying that. LOL

 

@Christine Sierra I had 5,000 I was told I could do much with that then to the sheriff sale and got it for 5,000 house needed no fixing I rented it out the week.rent 4 rooms at 500.00 and just repair the kitchen before they move in house is worth 100k

Originally posted by @Junon Celestin :

@Christine Sierra I had 5,000 I was told I could do much with that then to the sheriff sale and got it for 5,000 house needed no fixing I rented it out the week.rent 4 rooms at 500.00 and just repair the kitchen before they move in house is worth 100k

sweet deal! That's awesome 

@Christine Sierra

This is a great post. I’m a newbie too, only 2 rentals going to look at possible househack this weekend.

Best advice so far “keep emotions out of the purchase due your diligence, stick to the numbers”

Worst advice "real estate is more risky than my 401k just work and save money"

Not best advice but best learning by observation. My father invested in real estate by a college campus one property at a time over 30 years. He probably spent about $500,000 total over that time. But he laughed all the way to the bank when an investor came in and gave him 5 million for his property to do a big multi use development.

Worst advice: My mother is holding some money of mine and keeps discouraging me from investing it in another deal or several deals because her bank is offering .04% interest.

My parents are still married so I can’t figure out her mindset.

Alecia

Originally posted by @Zach Gring :

@Christine Sierra

This is a great post. I’m a newbie too, only 2 rentals going to look at possible househack this weekend.

Best advice so far “keep emotions out of the purchase due your diligence, stick to the numbers”

Worst advice "real estate is more risky than my 401k just work and save money"

 That is great advice. It's so easy to get caught up in the heat of the negotiation and to just want to win. Especially strong at in person auctions. You start to do mental gymnastics to justify the extra few thousand and it becomes a very slippery slope. Figure out your max number beforehand and stick to it!

It's unfortunate @Todd Pultz had to go through that experience.  

Touching upon Todd's point regarding insurance. As an insurance agent I see a lot of real estate investors picking up houses or properties for cheap and don't want to insure them for replacement cost and want to insure them for actual cash value and insure the property for a very low dollar amount on the property (sometimes just enough to cover the loan amount or what they put into the property if it's a cash purchase). One thing to remember is what cost x amount 5 - 10 years ago isn't going to be the same amount.

I would say reviewing your insurance and your property values on a yearly basis is extremely important especially if you don't insure them for replacement cost.

At the time of a loss it would be very frustrating for an investor to not have the purchasing power for a similar property in present day as they did 5 years ago due to the value of real estate increasing in the location.  In western PA we have seen a huge spike in property values compared to just 5 years ago.  

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Worst: if your buying cheap properties......(this was 2012 and we could buy quads for 20-30k). You don’t need insurance. You’ll pay more for insurance than you did the property. Made sense lol!

Result: 2nd property I bought which was a 6 unit for 21k and needed 40-50k rehab burnt to the ground 2 mornings after I closed with no insurance. I still pay taxes on the green space to this day. I could get that donated off to city and stop paying taxes, but every 6 months I want a reminder to how I failed so I don’t do it again.

My advice: attach your carriage to the fast horses and be a sponge to what they are doing. Overcoming fear is the first step! You will face adversity and you need to be prepared to handle it. Real estate done right will provide a life for you and your family with financial freedom that many dream of! When you see a speed bump, jump over it......when you face a brick wall, break that S$*^ down and when your feeling down about something lean on other successful investors for encouragement and direction to overcome and accelerate forward!

You got this and you can do it, but you are the only one that can stand in your way!

Top worst advice: “you should flip a house!”

Second worst advice: “you should hire that coach!” (for $20), mismatched to my target strategy)

Third worst advice: "X strategy is better than Y strategy" (rentals v. syndications v. flipping. Wholesaling v. v. v. v. etc.). Note: there is rarely a ‘better.' It entirely depends on your unique goals.

Updated about 1 month ago

$20k, not $20 :-)

Best:- I trust your judgement, just dont tell anyone else in the family as it's your money and nothing to do with them.

Worst :- Buy anything , it will keep going up and you can just sell it if it doesn't

I am looking around where we live and the numbers just do not make sense. I don't want to sink $50k to break even each month!

Honestly I love one of my mentors, but THE worst advice he keeps giving people is don't leverage USE ALL CASH! This is coming from someone who leveraged all 6 of his houses and is benefiting from said leverage, and has ridden the housing bull run of 2011-2020. Since he bought most of his properties before then, and some during.

Again love the man, and provides a lot of wisdom but that one in particular is insulting as house prices skyrocket. And I'm trying to explain to him the hypocritical nature of his advice, and how out of touch it comes off.

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