Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
In order to succeed..............someone or others must fail? Agree or disagree?
This is a general question, which pertains to pretty much anything, including real estate. In real estate, there are many properties, but only a handful are really good deals. Thus, one needs to compete in knowledge, price, and competency to obtain this piece of real estate. A matter of supply and demand, in which there is only one winner for a single piece of property. All others who do not have the means, money, finance, or knowledge to become the winning bidder, are the losers.
This is the truth that most do not want to acknowledge or accept. There is only one Super Bowl, World Series, or NBA winner in a given year.
So in reality, if Bigger Pockets is helping everyone on this website with sharing knowledge and experience, then doesn't everyone win? Not really, 90% of the people on Bigger Pockets never take action.
My belief has always been that There are no limits when it comes to success. Keeping that in mind, suggesting that someone must fail in order for another to succeed would be like placing an artificial limit on success.
That sort of limiting belief is common amongst quitters, which is why I refuse to believe it.
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
@Terry Lao Your choices and definitions are too narrow for most of the world. I used to think all I wanted was money, now I know it isn't the be all end all. By my definition I am very successful. Good paying W2 job, a couple real estate deals done this year. If what I read is correct, top 7% of the nation in salary. Does that make me more "successful" than 93% of the country? Nope. I want the freedom to not worry about money. When would you retire if it was all about money?
Financial Freedom isn't so much about freedom from work. It is more about freedom to do your best work, without money getting in the way (author unknown).
And, if for your definitions, the very word volunteer would not be in our lexicon. Money motivates you. I don't think there's anything wrong with that. But hopefully it is not the only thing that motivates you.
90% number is from a podcast that Brandon, of Bigger Pockets. That is a fact that he said of the percentage of people who listen or active on Bigger Pockets that never take action. Most wealth is created by real estate if you look at history. There are other ways to create wealth, but for sake of this post, I was limiting to real estate.
There is a vertical position ( buying now) and a horizontal ( future) component to success. If you buy now, and hold onto property in 2008, then you would lost money. If you bought in 2012, you timed the market perfectly. I used money as a simple way to keep score. If you bought and were to make money, then you were successful.
If you read in earlier posts, I said that you can attempt many times and lose, but all it takes is one success.............and had Thomas Edison in mind when I wrote the statement.
Nice to see that you are financially set, and don't have to worry like the 99% of the rest of us. The successful people like Mark Cuban, said that it is not about money, but rather he values his time. However, you and Mark Cuban, have reach a point where it is not about the money. Until a person reaches that point, then even though they hear it, they would not understand it.
Your statement, buy run down apartment and fix up, nobody loses. Only apply if there is one buyer. In a competitive market like San Jose, Seattle, or Las Vegas, I'm sure there would be multiple offers, thus multiple losers and only one winner.
No I do real estate because of the lifestyle real estate gives me. None of that is Money. SOME of that is the things that money can bring me.
Why do you think think it is valid to substitute succeed for money? A much more valid substitution would be to use the word happiness or self fulfillment as substitutes for success.
Why are those bidders losers? They successfully avoided buying a property that did not meet their criteria. You might know the story of Edison but must have missed his most famous quote.
There are an awful of of unhappy rich people. I have been to some of the poorest parts of the world. Yet most of these people are happy and self fulfilled. Feel free to chase money if you wish. Me, I move towards being the best I can be.
I use the MONEY as a universal word that everyone in the world understands. If I took your example, and used the word happiness or self fulfillment, then we have 100's of definitions. Money there is only one simple definition.
You use the word lifestyle, which could mean home, furnishings, travel, food, clothes, cars, etc. but all those things need money.
I agree that there are unhappy rich people, but I would imagine there are more unhappy poor people. I believe money will solve 90% of a person's problems. The other 10% like heath/medical issues that money cannot help, that is religion. But money will give you the best medical care available.
Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
8y
After reading all these posts and comments, I realize that there are two areas of the brain from which people are falling into...........either idealistic or realistic.
Idealistic - belief that everyone wins and have a happy outcome. Thus, ideal come.
Realistic - belief that outcome might not always have happy ending. A single or few winners, and many/lots of losers.
Money is a measurement of how much value you have created in a market. It's certainly a measurement of SOMETHING, but absolutely not success.
in a capitalist market, it's certainly an easy metric to compete for. I agree with you whole heartedliy in your overall spirit of competition for this post. What I do not agree with is, as @Joe P. said, your very binary viewpoint.
you're measuring your success against others that aren't playing the same game. It's just short sighted. let me provide some examples.
MOST people on the planet are born without opportunity. Beating them is not anything to brag about, perhaps the correct position is to be shameful. Don't we have enough?
If you name the most famous person on earth that you can think of, a vast portion of the population still will have never heard of them. Are they still the most successful?
If you had all the money in the world, it would only be temporary anyway. Financial success at it's pinnacle will always be fleeting.
If you don't smoke weed, and I do, then I win. Straight up ;) ;)
We are not all playing for the same reasons
so your first point: that we are in a zero sum game, is incorrect. That's economics
your second point, which I believe is to encourage our ambition to compete against each other I do appreciate, but your approach to it I can't agree with.
all that said, I do value your posts like this. You're wrong a lot, but creating conversation over meaningful and interesting topics. so thanks for that.
Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 957 votes
8y
@Terry Lao the example you use is of one single deal. ie, you buy it and I don't. or Eagles won the SB, no one else did. But what's missing is that there are other deals, next season, etc. No one person can buy all the deals.
So yes, on a deal by deal basis there are "winners" and "losers", but there are many battles.
(as an aside, the winner may not be the buyer in some cases, the winner are all the potential buyers that avoid a money-pit or horrible deal)
In previous post, I mentioned that there is what I call a vertical (buy now) and horizontal (future) factor in purchasing real estate. If you buy now and hold, it might not be a good decision, as seen in 2008 (recession). Thus, the only true factor that can be measured is the amount of money gained from the real estate purchase, and if sold to realize the gain.
The " success", "money", is a moving target. I can be a success if you are the winning bidder. It can turn out to be bad investment, as seen in the year 2008.
Nice input. I often said, you must be one step ahead of the game in real estate. Do you think that I did not know the outcome of the responses? In any post, you need equal sides to get the conversation going. Sorta like the Las Vegas line for the Superbowl, need equal betting on both sides, but don't really care too much about the outcome.
The people who buys now in Las Vegas might be buying on the very pinnacle of property values. Thus, you might win the bid, but lose down the road due to home prices going down. I still think remainder 2018 is still good. The year 2019 might be turning point. Then 2020 go downward trend.
I got out-bidded on at least 10 offers in Las Vegas. Now, just hold a bit more on the 4plexs that I have before taking profit. I'm looking into small business now, like a franchise (subway) or small mom/pop pizza location. The cashflow numbers are even better than real estate. Like to the tune of 7k a month cashflow and break even at 1 year/ ROI.
Investor · Houston, TX · Member since 2017 · 1k+ posts · 871 votes
8y
No, it might seem like this in a vacuum, but it isn't really a zero sum game.
A tired landlord buys a house in 1999 for $100K. Now it is worth $200K. He's only got 11 years left to pay for it on the note, and he's tired of tenants and the whole landlord grind. You buy it for $25K more than he paid for it. You get a deal, he gets at least some return on his money. Or even better, he gets an even better deal, in exchange for seller carry terms. After all, all he ever wanted was that monthly check coming in... who loses here?
Or there is the public storage outfit that is only operating at 60% occupancy. Not managed as well as it could be. They sell and move on, and you pay a fair price for it, based on the cash flow valuation, and then use your proven know-how to increase the occupancy and double your equity in a couple years. Again, not sure I see a loser here.
And that's the thing. I'm on chapter 3, and you are on chapter 27. So I really should not try to compare my chapter 3 to your chapter 27, its not apples to apples.
Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes
8y
@Terry Lao this is an interesting waste of time for a Friday break from work, so I will bite. Based on your measurement of money, your argument is flawed. The bases of your theory is that money is the measurement of success. That is fine if that is your belief. However, if you apply that to your example of multiple people bidding on a property your assumption falls short. By definition, the people who did not buy the property did not lose any money to their opponents. Therefore, based on your defining criteria your example is incorrect. If applied farther up stream to the seller and the buyer, your theory still is to generic to be a valid point. In most cases the sellers and the buyer are both winners: the seller wanted to sell and the buyer wanted to buy. They both got what they wanted, therefore they both win.
If both sides did not get what they wanted the deal would not have been consummated. It is clear that if the deal did not close, neither side gave money to the other; neither side lost the game. The game being defined as the sale or purchase of the property. You may ask about earnest money or potential down payments that could potentially be lost. But those terms are case by case to specific instances, not a definite outcome of all transactions. Therefore, it would be inappropriate to apply that "carve out" to a general theory as yours.
As many have stated real estate is not a "zero sum" game. To summarize, if the deal closes both sides win because they both got what they wanted. People who bid and did not "win" actually did not lose any money, so by your measurement of success they technically did not lose. Therefore, there does not have to be a winner and a loser in all real estate transactions.
Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes
8y
@Account Closed
Quads up over 300-400% of ROI. Can net between 130-160k each now, if walk away now in Las Vegas.
Your example is not what I'm talking about. I'm saying, for example, in the most simplistic way, any property in Las Vegas. There will be multiple offers, and only one winner. It is a winner if you bought in 2012-2014. Now, it is harder to say due to Las Vegas appreciation being close to pre-recession highs.
@Terry Lao the example you use is of one single deal. ie, you buy it and I don't. or Eagles won the SB, no one else did. But what's missing is that there are other deals, next season, etc. No one person can buy all the deals.
So yes, on a deal by deal basis there are "winners" and "losers", but there are many battles.
(as an aside, the winner may not be the buyer in some cases, the winner are all the potential buyers that avoid a money-pit or horrible deal)
You mean like thank God for unanswered prayers?
I think if you do enough deals there are going to be some real clunkers. It is unreasonable to think they are all going to home runs.
A swing trader in the market will make 20 trades a week (as an example) -- 9 will be up, 9 will be down, and 2 will be push trades.... so how they earn any money? They establish and implement their own trading rules, using stop losses and other risk management limits they put on themselves, and they never deviate from them. So the 9 good trades earn them $100 each, and maybe a couple considerably more, while the 9 bad trades only cost them a $50 hit each.
In REI it is so much easier to spot the winner, and so there should be far more good deals than bad, but the trading rules should still apply, in order to limit the damage of the clunkers.
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
8y
When someone buys an iPhone Apple succeeds, the phone carrier succeeds, the salesperson succeeds. Does the person buying the phone fail? No. There is no fixed pie in economics.
Rental Property Investor · Tacoma, WA · Member since 2018 · 113 posts · 149 votes
8y
Certainly not everyone wins all of the time. However, in a growing economy there can be a lot more winners than losers and gains, on average, can be positive, even highly positive. When an open system, like the economy, is presented as a pie graph with individuals, companies, groups of people or countries each getting a percentage of the whole, this is not a good model. In the model of a pie, no one can get more without taking from another. Consider the fact that US GDP is 24% of world GDP. Fifty years ago that percentage was about 38%. OMG, who took all of our wealth? The answer, no one took it. The US economy has growth by four times, but the world economy has grown over seven fold. Look also at GDP per capita, wealth per capita or any other metric. Americans are getting richer as is the world. Sure, wealth can transfer from one individual to another. However, wealth is also created and this creation creates winners without the need for a loser.
1. I would say money is the best measurement as I challenge you to come up with a better measurement.
2. Buyers who did not buy the property did not lose any money to their opponents. True. However, they had lost the opportunity which is a cost. You should know better than others, as you are from Los Altos, CA. You see first hand how many bids on a SFR. Those that won bids (2010-2018) definitely can see huge appreciation gains to the tune of 500k or more.
3. The winners are one buyer and one seller. Everyone else who bidded lost. Then onto the next property.