Share your 20/20 Hindsight - what would you do differently day 1

Rental Property Investor · Waycross, GA · Member since 2018 · 39 posts · 40 votes

What single piece of advice would you give to a newbie to share the hind sight you've no doubt experienced by this point. Knowing what you know now, what would you have done?

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Chris Szepessy

Catskill, NY · Member since 2018 · 636 posts · 668 votes

I would've started earlier in life by buying a 2-4 unit instead of a single family.

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Aaron L.
Kansas City, MO · Member since 2015 · 123 posts · 46 votes
8y
@Thomas S. I've read a bunch of your posts about not buying cashflow with equity, dead equity tied up in a a house, etc. I wanted to ask you a couple questions for clarification, but not sure if this thread is the place to do it... Can I send you a message?
1 Reply
Dean Letfus
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
8y
When you're talking about looking back my number 1 regret is listening too much to the nay sayers. I should have bought a whole lot more houses when I started. And kept them. I was often influenced by the conservative investors which cost me a ton of money long term and turned me into a flipper rather than a buy and hold guy in the USA.
So do your homework first obviously, but then check that you have a pair and go for it. Especially if you're younger you'll learn a lot from your mistakes anyway. So GO FOR IT!
7 Reply
Llewelyn A.
Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
8y
Day 1?! Well.... Day 1 was in 1998 for me when I bought my first Investment Property in Brooklyn, NYC.
What would I have done differently? Slapped my friends and relatives in the head who complained that they did not want to partner with me to buy more NYC properties because they didn't want to fix toilets in the middle of the night.
20 years later and I'm vastly wealthier than they are, to their regret.
Had I pushed the issue with physical violence, maybe they would have listened.
Incidentally, I hire a service for $50 to snake out a toilet, even if it's in the middle of the night. So the scenario where I am the one snaking out a toilet is just an excuse for those with very low risk tolerance.
8 Reply
Nancy P.
Naperville, IL · Member since 2018 · 330 posts · 357 votes
8y
This is a great thread! For me, buy more foreclosures when we started in 2010. My risk tolerance was very low. Second, start eviction sooner. Our first tenant was horrible, probably wasn't even who he claimed to be. In 2010 in Naperville it took FIVE MONTHS to go through the eviction process...and we listened to his excuses and took partial payments for two, so seven months with almost no money. (All he ever paid in full was the FIRST month, and 1/2 of that went to the Realtor who found him. We've never used a Realtor to find a tenant since.) Ouch. The one thing I did do that I think is imperative is understand basic rental laws. I see people on here saying they ask potential tenants illegal things like "Are you married?" and I shudder. Lawsuits waiting to happen. Just because you own the property doesn't mean you get to discriminate.
4 Reply
Account Closed
Rental Property Investor · Houston, TX · Member since 2018 · 106 posts · 56 votes
8y
@Margie Fuller
I started by reading Rod's book and listening to his podcasts. (Lifetime Cashflow). I eventually hit the books written by biggerpockets.
This will give you much better understanding how deals work and the terms that you need to know. You do not want to go out to an agent not knowing what NOI is and COC is.
3 Reply
Account Closed
Real Estate Broker · Aurora, IL · Member since 2017 · 159 posts · 53 votes
8y
Found BiggerPockets and other financial books I have read now earlier in life! Especially before I bought my primary residence. Looking back I would have probably looked to househack and have made better financial decisions early in life, which would have set me up to invest earlier.
Nevertheless maybe then I would have been content with where I was at and now been so aggressive to self improve and set myself up for massive future success
4 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Wish I would have gone bigger sooner. REI is much easier and profitable with scale.
4 Reply
Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
8y
I would have learned the lease option model sooner. That would have turned my 5k loss on my second flip into a 20-40k gain.
I would have vetted the investor out better in Phoenix that I invested with where I ended up losing 70k. I would have read the contract better and asked for some references.
But then I ask myself, “would I have matured as an investor as much as I have if I hadn’t experienced these loses?” I don’t know if I would have. I think both the successes and the failures provide a depth of experience and knowledge that one can’t get with out Experiencing both.
480-206-1209 Podcast Guest on Show #287
4 Reply
David Baier
Rental Property Investor · Orlando, FL · Member since 2018 · 545 posts · 386 votes
8y
Definitely would have House Hacked a 4-plex instead of buying a single family home. Great way to get started.
3 Reply
Jason Goretzki
Fort Lauderdale, FL · Member since 2016 · 214 posts · 95 votes
8y
My hind sight 20/20 maybe not relevant to this forum, but just get started already. Stop saying you are "getting started", & just get involved already. Look at properties while you are growing your money. Talk to people that are active. Then it's less risky when you're ready to take action on a piece of property. I find that I allowed myself to not have the funds to be involved, as a blameless way to not get started & avoid the risk.
4 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
8y
1. Buy more.
2. Don't tolerate subpar employees nor any sort of insubordination. That goes for contractors too.
Podcast Guest on Show #121
4 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
8y
started a real estate investing forum
You often make more money selling shovels than digging for gold
8 Reply
Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
8y
Shoulda' bought more MF properties with leverage a few years ago. Hindsight sees all! LOL
2 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Started earlier (and I started at 22 lol) and understand what makes a good Reia meeting and what doesn’t (aka guru selling). Probably also vetting my PMs more. I don’t really have any major regrets right now but it probably just hasn’t been long enough
0 Reply
Carlos Gonzalez
Investor · Phoenix, AZ · Member since 2015 · 346 posts · 170 votes
8y
start your real estate life style by buying a fourplex via FHA and as soon as you move in get the other units rented with good tenants. Then use the gross rents to pay the mortgage and invest the money back in to the property to fix it and upkeep it; some of those expenses you will get them back in your taxes and save save save money. Do this for one year and then do a refi out of the FHA so you can buy another fourplex with FHA again. Do the same thing, as you do this every year, your cash flow and your taxes grow exponentially (almost).....it's all about that cash flow I tell ya.
Then join a mastermind group, this bigger pockets virtual community is great so take advantage of it (there are lawyers here, CPAs, people with years of experience in real estate, anything you can think of you about real estate is here, this is literally a gold mine). My regret is not having been part of a mastermind group yet but I'm still searching for it. I'm making good contacts so that's good. There are some people who also want to be part of one but don't really know what a mastermind group is or how it should work; I know it could mean different to everybody but basically the mastermind group should help all the people who want to be part of it.
0 Reply
Brett Goldsmith
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
8y
Set transactions and partnerships up the right way to protect your interests. Only do business with people you trust. Ensure you are capitalized enough to take on projects; things generally cost more than you think and hurdles will arise.
3 Reply
Jon Haft
Rental Property Investor · Tyler, TX · Member since 2014 · 20 posts · 46 votes
8y
a lesson apparently I am still trying to learn and that is holding subs to a timeline and also getting them to clean up their mess when they are done
I also would not have over remodeled on flips ive done. the $35 granite would have sold just as well as the $55 granite
with hindsight I would have begged borrowed and steal to buy as many homes back in 2009-2010
4 Reply
Account Closed
Garden Grove, CA · Member since 2017 · 50 posts · 19 votes
8y
It seems that the common theme is most people regret selling properties in great areas.
But if you can take a profit and increase it by repeating the cycle then that is the way to go. I sold every property and I wish I kept it, obviously.
All too often we do deals that are within our own capabilities, think bigger, think upside, strategy, how can you add value to this transaction.
I would advise and continue myself, to be able to get financing and partners to leverage more. I would try to find equity investors vs hard money, that debt service on a property is tough. And if it takes longer to sell then watch out.
Have a good exit strategy, know your plan going in, if the plan changes then have that as part of your plan going in.
Interest rates are at historically low levels and have been for many years now, thus increasing values everywhere. Where are they going is the big unknown right now, what is the forecast for interest rates, they are probably going up long term. If you are able to buy a property and hoping on appreciation to create profit be careful. Buy based on fundamentals [CPU, $SQFT, Rents, cashflow etc].
Obviously we all wish we bought at the dip 8 years ago but look long term where are prices going to be in 10-15 years. Can you cash flow a property through the next dip if need be.
2 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
1. Like almost everybody, buy multi family early and often. House hack, house hack, house hack. Trying to talk our kids into that very idea right now.
2. Hold onto that property in 2008-2012 (SFH, in California. Ouch!)
3. Do at least some of your own rehab to learn, and my learning is; do NOT go cheap. Of course, do not go most expensive, but that middle ground will save money in the long run.
4. Pay yourself first. Save 15% of your income starting from day 1 of your day job. Then buy that income flowing/mortgage saving multi family property (go ahead and ask your parents for that down payment, and pay them back with the savings).
5. Find a partner that thinks the same as you. You can't buy real estate if your partner isn't on board and he/she is a spender while you're a saver.
5 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
@Shiloh Lundahl got your PM but you may need to unblock me so that I can reply
2 Reply
Account Closed
Garden Grove, CA · Member since 2017 · 50 posts · 19 votes
8y
Also I bought a 4 plex long time ago as the house hack before it had a name. One way to be able to buy a 4 unit is FHA, low down payment but you need a w-2. So if you are just starting and need to get into a property get a w-2 job so you have some income. The units will help you qualify but do not pay too much for 4 units. Often times the CPU on 4 units right now are higher than a condo. If you can buy a condo for $100k and a 4 unit for $500k then the condo might be a better starting project. But a 4 unit will be worth more based on the increase of rents, but remember the exit strategy who is going to buy your improved value condo vs 4 plex. Keep the purchase and resale price in mind not to exceed the conforming loan amounts and you will have a bigger pool of buyers.
1 Reply
Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
8y
@Mike Dymski I’m not sure how that happened. I will fix that. @Mindy Jensen how do I fix that?
480-206-1209 Podcast Guest on Show #287
0 Reply
Michael Gansberg
Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
8y
@Margie Fuller - I'd have started with a more upscale property requiring less work and in a better area(they were available and affordable, but I was lured by higher theoretical cap rates, which proved illusory.)
I've repeated that mistake over the years- I've often thought that high-yielding properties would be more lucrative, but in the end, they've generally proven not as profitable as better properties in nicer areas. Not to say I haven't had home runs from those kinds of properties; I have *wink* *wink*, but not enough home runs to justify the added risk, IMHO.
MG
3 Reply
Sam B.
Rental Property Investor · Houston, TX · Member since 2013 · 476 posts · 294 votes
8y
Buy more.
1 Reply
Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
8y
@Shiloh Lundahl , did that fix it? send me a note if you still need help.
[email protected]Podcast Guest on Show #261
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