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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Mandy Ellett
Rental Property Investor · Kenmore, WA · Member since 2017 · 30 posts · 14 votes
8y
Buy a small multi-family instead of the terrible sfh we bought in college.
1 Reply
Amber Koontz
Houston, TX · Member since 2015 · 204 posts · 68 votes
8y
I would get into small multi family right away. (2-4)
Routes: FHA, HML to Conventional, partner, etc.
Why: I would build equity to possibly refi, or sell…most likely just refi and use equity to work my way up to 5+ units….
The ultimate goal is to get into apartment investing.
3 Reply
Matt B.
Blue Point, NY · Member since 2015 · 88 posts · 31 votes
8y
I would have bought a house while living in college with roommates and had them pay my mortgage... I was told to do it but I never thought I had the money for it, little did I know... also I would have house hacked before buying a SFH...
4 Reply
Steven Tucker
Member since 2018 · 1 post · 2 votes
8y
I would have definitely bought a 4 unit and lived in one on my first purchase at 22.
2 Reply
Jon Haft
Rental Property Investor · Tyler, TX · Member since 2014 · 20 posts · 46 votes
8y
back in 2014 we wanted to get into flipping and so we flipped a house in a suburb of DFW. We only made $15,000 on the flip and at the time we needed the cash to get the next deal. Looking back we would have made that much in rent the 1st year and would have then made that much every year since then not to mention that the value of the house has gone up by at $40,000 since then
2 Reply
Erik Sherburne
Investor · Saint Paul, MN · Member since 2015 · 98 posts · 64 votes
8y
Stop analyzing and worrying about $5/month difference in cash flow and just do it.
4 Reply
Joshua Benjamins
Lender · Virginia Beach, VA · Member since 2018 · 49 posts · 38 votes
8y
BUY AT THE FUNERAL!! SELL AT THE WEDDING!!! At the current moment everyone and their grandma are jumping up and down celebrating (wedding like) telling stories about how much money they made or will make in Real Estate. Try to find excitement like this among the masses 10 years ago. I would be saving up as much capital right now or selling these All Time Highs (ATHs) and banking some cash reserves. Wait a while for the funeral (foreclosures, short sales)to come back, ask anyone who has been doing this for 25 years and they will agree. It’s a full revolving circle each time. Buy when people hate Real Estate! Patience is a virtue!!
7 Reply
Margie Fuller
OP
Rental Property Investor · Waycross, GA · Member since 2018 · 39 posts · 40 votes
8y
@Joshua Benjamins that reminds me of Warren Buffett's buying strategy -- buy when everyone is running scared. BUY, BUY, BUY
2 Reply
Chris A.
Bloomington, IL · Member since 2018 · 8 posts · 1 vote
8y
I bought a 2 unit, and I would've had them check the popcorn ceiling in the kitchen for asbestos. I checked it after I bought it, and it has like 1 or 2% in it. So, now I'll have that expense.
0 Reply
Michael Kalisch
Investor · Airmont, NY · Member since 2017 · 30 posts · 7 votes
8y
wouldhave started educating myself on the subject a few years earlier.
1 Reply
Rita Medeiros
Rental Property Investor · Pompano beach, FL · Member since 2017 · 478 posts · 194 votes
8y
I would've started when I was 18, I would've educated myself earlier, I would not have sold any of my primary residences. However, perhaps because I didn't do the preceding, contributes to the fact that I am so aggressive & passionate today.
2 Reply
Noel Challenger
Realtor · Paterson, NJ · Member since 2017 · 134 posts · 97 votes
8y
I would've gotten my license sooner and network like crazy with anyone and everyone!
0 Reply
Chris Youssi
Rental Property Investor · Caledonia, IL · Member since 2015 · 290 posts · 213 votes
8y
Love this thread lots of good insight. EZ answer for me personally
1.) If I could have financially, I would have bought more SFR earlier than 2015 still have forced major equity on all my deals but far and away the best way to invest IMHO
2.) Always follow my # 1 Proverb no matter the appreciation "You can never lose money by taking a profit!". Selling 4 /30 this year taking money off the table preparing for larger purchasing opportunities.
3.) Once in awhile we get caught up and "love our investment". Never lose sight that this is a business and do not fall in love with your properties. Sell high buy low no matter leaving your emotions out of the decision. EZ to type sometimes difficult to achieve.
Best wishes moving forward.
1 Reply
Margie Fuller
OP
Rental Property Investor · Waycross, GA · Member since 2018 · 39 posts · 40 votes
8y
@Noel Challenger I had my license for 16 years. I got mine when I was 23. I learned a lot from having my license, but did get bogged down in the business and never got around to investing. Don't let that happen to you. I remember watching a video back when I first started in the business that said, "You don't get rich selling real estate. You get rich owning it." As many people as I helped make that a reality for them, I should have taken more time for myself. I guess that would be one of my Hindsight 20/20 responses. :)
1 Reply
Margie Fuller
OP
Rental Property Investor · Waycross, GA · Member since 2018 · 39 posts · 40 votes
8y
@Chris Youssi I like the advice of Amy Arata on Ep 270. She said there's not a problem with buying a beautiful Victorian home that you want to return to its former glory, if it is your own home. But not for an investment property. It's kind of like not naming animals you plan to eat one day. :) LOL Ok maybe that was a little over-the-top. A friend of mine used to have cows. She said their names were Lunch and Supper. Maybe we should name our properties "College Fund," "Retirement."
1 Reply
Austin P.
Rental Property Investor · Los Angeles, CA · Member since 2018 · 74 posts · 33 votes
8y
A lot of people have mentioned buying a multi instead of single family home,
@Dustin Beam @Jason D. @Mandy Ellett @Amber Koontz or anyone else, could you explain why? I understand that MFR will most likely produce higher cash flow, but if a huge part of your first investment is the learning experience, would it be more wise to start small with a SFR before moving to MFR which has more moving parts? Also would you still suggest a MFR over SFR if you don't want to house hack?
0 Reply
Mandy Ellett
Rental Property Investor · Kenmore, WA · Member since 2017 · 30 posts · 14 votes
8y
We originally bought ours to live in, it wasn't in an area with good rental potential compared to the surrounding areas. We tried renting it out for year, lost money on it, got scared and sold it. Where we went to college there were some great areas for rentals with small multi-family units, but that never even occurred to us as something we could do.
17 years later we look back and wish we would have had bought a property based on it's investment potential. I actually thinkwe would have learned more about "landlording" by house hacking a small multi family, being there in the trenches on a day to day basis, than we did by renting out our sfh from a distance. It certainly would have been a better investment in the long run.
1 Reply
Dean I.
Tucson, AZ · Member since 2016 · 120 posts · 127 votes
8y
1. Don't assume anything: I assumed that I couldnt get into flipping houses because I had no money saved up. I further assumed that I would have to wait a couple more years to build up that savings. Two years wasted.
2. Talk to the right people. One of the reasons I continued to assume the above is because I spoke with a real estate broker buddy of mine who basically confirmed my assumptions. Needless to say, I'm not using him as my agent today.
3. Do your research before you think your ready. Ironically, I already knew this from past business experience, but again, my assumptions got in the way. Had I started researching flipping houses when I first wanted to get into it, I would have realized that I didnt actually need any money to get started and I would have started my flipping career many years ago and probably had a really nice portfolio to boot.
4. Accepted less on my first flip. Conventional wisdom says to get as much profit out of a deal as possible, but looking back, I wish I had accepted a lower offer, closed on the house and moved on to the next one. Instead it took 6 months to sell my first house. Now, I still try to get as much as I can out of each flip, but not at the expense of not being able to move to the next one.
5. Keep doing the numbers. My second major mistake I made when I first started flipping houses was to aim for too high of a profit. It took me almost a year to find my second flip. I reran the numbers for the houses I bid on in the past and realized that other investors were shooting for a lower profit margin than I was. Once I realized this, I readjusted my profit margin and immediately started getting offers accepted and I started flipping houses one after the other. I didn't every over accepted though, just enough of them to keep my pipeline full.
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
I would have gotten started much earlier.
[email protected]512-888-9122
The Moorhead Team5140 Reviews
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Jorge De Jesus
Katy, TX · Member since 2017 · 372 posts · 140 votes
8y
When all else fails, JV with either side
0 Reply
Mark Nickoson
Rental Property Investor · Dayton, OH · Member since 2015 · 79 posts · 85 votes
8y
I bought a property at a Sherriff's Auction. I paid for it without a loan so my holding cost didn't include loan payments, but it took me years to make required updates because I didn't have the money to hire contractors and I didn't have much time. You have to treat real estate like a business and get the work done. I learned a lot of lessons by doing the work myself, but I would have been much better off finding some way to get contractors in to get the work done quickly. I probably spent $10K in taxes, insurance and utilities. And because I did not have the property placed in service (ready to rent), I missed out on a few years of deducting depreciation on my taxes. When you buy a property, have a plan to get it rented or back on the market in less than 60 days.
1 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
I would go bigger sooner. Most people on this site and everywhere feel they need to stay small or for some reason aren't good enough, smart enough, rich enough to go big. We feel that we need to graduate or get comfortable with what works. It took me until 2016 to go big. I am happy with where I am at, but I look back a realize that it was me that held myself back all those years.
Stop making excuses, make sure you are not comfortable and dream big!
4 Reply
Krishna Chava
Specialist · Carrollton, TX · Member since 2016 · 145 posts · 100 votes
8y
I would manage myself for at least an year before handing off to a good property manager. Would never choose a property manager whose sale pitch is that he can do it for less percentage than others. You get what you pay for; learnt the hard way.
1 Reply
Patrick Kelly
Investor · canton, MA · Member since 2015 · 33 posts · 8 votes
8y
Have a larger reserve account and money set aside for repairs than you think you need. Something will always go wrong with your rehab and things always break. You will sleep better at night knowing you have reserves to take care of the issues as they come up.
0 Reply
Dustin Beam
Kansas City, MO · Member since 2015 · 609 posts · 321 votes
8y
Originally posted by @Austin P.:

A lot of people have mentioned buying a multi instead of single family home,
@Dustin Beam @Jason D. @Mandy Ellett @Amber Koontz or anyone else, could you explain why? I understand that MFR will most likely produce higher cash flow, but if a huge part of your first investment is the learning experience, would it be more wise to start small with a SFR before moving to MFR which has more moving parts? Also would you still suggest a MFR over SFR if you don't want to house hack?
My opinion only. But you gotta learn at some point. My first investment property was 12 units that I self managed. That felt a lot like jumping into the fire, but I survived. Getting a duplex or fourplex will be fine if a person is up to the task in the first place. If they are not, better to find out sooner than later. That's the personal/emotional part of it.
The financial part of it goes like this, I bought a house for $128k that needed updating in a good part of town here. You used to be able to get some cheap houses in good suburbs for great prices haha. Anway, my monthly PITI was roughly $1000/mo. Sure, some of that went to equity but most went to interest/taxes/insurance. So let's just say $700/mo was essentially wasted. I was there 8 years. ($700/mo)x(8 years)x(12 mo/yr) = $67,000 down the drain. Granted, I did a lot (LOT) of work to my house and ended up selling it for about $60k more than I bought it for with a net profit around $30-40k. I didn't keep exact track of expenses so it's a rough estimate. Some of that would have been from appreciation, and some from sweat equity. But who cares? I could have gotten appreciation and sweat equity in a multi.
Long story short, I could have essentially lived for free, gained valuable LL experience, AND gotten the appreciation and sweat equity in the property.
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