Rental Property Investor · Tampa, FL · Member since 2017 · 20 posts · 10 votes
Question for all of the real estate veterans on here who have weathered the good, bad and ugly.
What do you know now that you wish you knew when you were beginning your journey?
I've searched the forums, but most posts look dated or didn't gain much traction. I'm primarily focused on buy & hold small multifamily / single family properties for cash flow, but I would welcome investors from all backgrounds to chime in!
It's not over till it's over...so keep persisting until you make it happen.
So many deals fall through, either as a buyer, seller, or landlord, for so many reasons. But the key is to keep persisting to close the deal and simply make it happen, by taking each roadblock within a transaction as an opportunity to learn how to get creative and overcome it. Whether it is getting a potential tenant to rent with you, a contractor who ran off with an incomplete job, a seller who backed out of the deal, a lender who doesn't want to finance your deal, you will need to push through till you accomplish your task.
Question for all of the real estate veterans on here who have weathered the good, bad and ugly.
What do you know now that you wish you knew when you were beginning your journey?
I've searched the forums, but most posts look dated or didn't gain much traction. I'm primarily focused on buy & hold small multifamily / single family properties for cash flow, but I would welcome investors from all backgrounds to chime in!
Keep in mind "it isn't personal". When things go wrong, and they will, it's important to "suck it up and keep on moving".
It's not over till it's over...so keep persisting until you make it happen.
So many deals fall through, either as a buyer, seller, or landlord, for so many reasons. But the key is to keep persisting to close the deal and simply make it happen, by taking each roadblock within a transaction as an opportunity to learn how to get creative and overcome it. Whether it is getting a potential tenant to rent with you, a contractor who ran off with an incomplete job, a seller who backed out of the deal, a lender who doesn't want to finance your deal, you will need to push through till you accomplish your task.
Thanks for the advice @Account Closed preaching constantly...the difference between working on your real estate business versus in your real estate business.
@Max Baker. Get everything in writing, or it doesn't exist. Get the seller to buy a 12 month warranty for property so you don't spend a ton on repairs in the first year. Always always always get a professional inspection done. Never believe the listing agents pro forma, and run the real numbers yourself. Use a real estate agent if you have never done a deal before. It's ok to walk away from a "deal".
@Ujwal Velagapudi thanks for your response! I truly believe that with enough grit and perseverance anyone can find success assuming they have put in the work to build a strong foundation through education.
Of all the challenges you’ve faced, what setback led you closest to the verge of quitting and how did you overcome it?
Make a plan and work on your business every single day. Commitment to taking action is #1. Today's my 31st birthday and here I am :) I'll be running to Home Depot later and working on associated repair project this weekend as well. My gift to myself is the sense of accomplishment I get by finishing things.
Thank you! I actually vacillated about posting that because I'm not looking for happy birthdays, just trying to make a point.
Commitment isn't static. It has to be constantly worked on and reinforced. The world is trying to distract us from our goals and the work it takes to achieve them
@Max Baker. Nope to your question. Agents often list "pro forma" to state what the numbers could be. Kind of like square footage. Buyer has a due diligence period to figure it out for themselves. It's not like misrepresenting that there's been flood damage or the like. Numbers are always estimates. I always laugh at pro forma. "Potential rents". Sure. Sure.
@Taylor L.. Isn't it awesome when you finish a project and can see the work you've done?! I was never handy in my 20's. Not even close. Now? I've done some things that 25 year old Tony would be shocked at! Man, it feels so good. And 25 year old Tony would definitely appreciate the money old man Tony has saved. Lol.
@Max Baker. I want to answer your question to another poster about what setback almost made you quit. Mine was two fold. One was a crushing defeat in California real estate 2003-2010. The other was a divorce in 2013. One cost me $100k (yes, that was crushing to me), and the other cost me much more than that. I was back to renting, and owned zero properties after divorce. It took 3 years for me to recover financially and to get my head back around to "real estate can be a good thing". I'm thriving big time now, with my girlfriend. But man, I swear I said more than a few times; "never getting married again and never owning real estate again. I want to be free".
@Taylor L.. Isn't it awesome when you finish a project and can see the work you've done?! I was never handy in my 20's. Not even close. Now? I've done some things that 25 year old Tony would be shocked at! Man, it feels so good. And 25 year old Tony would definitely appreciate the money old man Tony has saved. Lol.
110%. The best way to learn anything is to go just a little bit out of your comfort zone, watch a ton of YouTube videos, and give it a shot. Eventually your comfort zone and competence get far larger than they used to be.
@Anthony Wick wow that's a great story. Glad to hear you were able to overcome that adversity and stay the course.
I can definitely relate to the lack of handiness. I come from a quantitative background, and I've been able to dial-in my deal analysis quickly, but repair work is an entirely foreign frontier for me.
I'm torn between the goal of building a serviceable skillset in every aspect of RE (handiwork, property management, etc.) versus doubling down on my strengths in analysis and relationship-building.
Some of the wisest investors I have spoken to are split on this topic.
We got started a year ago and will be closing on our 8th and 9th door on our one year anniversary of our first deal.
I would say start taking real concrete steps to set yourself up for investing as soon as possible, and then always be learning on the side (reading books, watching YouTube, analyzing deals, going to open houses, networking, etc). Also, determine your strengths so you know what to work on and what you’d eventually like to hire out.
We first lived below our means for years, then discovered REI, then got a heloc on our primary residence and bought a triplex six months later. The pace has been challenging but not overwhelming.
@Max Baker Hey Max, Cash is king! It’s a way over used term and seems pretty obvious. But the lower the down payment for each deal the quicker you can scale. I didn’t follow that advice so I’m scaling slower than I’d like. A great book that gives many tips on how to keep more cash is Crushing it in Commercial Real Estate. I highly recommend it. Also it’s ok to analyze tons of deals and lose your first few. Most people over pay. Took me 1.5 years to find my first deal. Was out bid way to many times. That’s ok. Keep hustling and remember achieving is hard but sure beats the alternative. Good luck!
It is important to not get angry, as you proceed with a Rental. And many will seek to get you angry, intentionally, due to when you are angry; then you are more vulnerable, easier to be taken advantage of, due to you are not thinking, but are emoting instead. In the book, The Varieties of Religious Experience, by William James, is cited that Japanese warriors in past centuries, sought to not be emotional, so they were better in battles. And for this reason, Japan's leaders accepted China's form of Buddhism into Japan, due to it was noted that China's Buddhist missionaries into Japan; they devoid of emotions, while being congruent of one purpose. And Japan's then leaders reasoned, if such emotionless congruence could be gained by Japan's swordsmen; then Japan would have even better fighters in battles. (Am not a practicing Buddhist, & am only reporting what I have read on why Buddhism was accepted into Japan. And The Varieties of Religious Experience is an examination of all religions, in an even-handed way, without promoting any one religion. And William James, who died in 1910, wrote this book, to view all religion as science evaluates- views all things.) Emotion is valuable when writing, but not so, when doing actions, when in doing work. And work is best done at a steady pace, while thinking, & done with little emotion.
@Anthony Vander Meer Thanks for your response. Sometimes the best advice is right in front of us but hard to implement. Appreciate the book recommendation...I'll be sure to check it out.
If you could do it again, how would you begin building your portfolio with lower down payments to scale more efficiently? House hacking, seller financing, alternative creative solutions?
It seems like by prioritizing scale you may sacrifice cash flow in the short term given higher interest rates, PMI, etc. How do you strike that balance between efficiently scaling while maintaining attractive CF/door & RoE?
Question for all of the real estate veterans on here who have weathered the good, bad and ugly.
What do you know now that you wish you knew when you were beginning your journey?
I've searched the forums, but most posts look dated or didn't gain much traction. I'm primarily focused on buy & hold small multifamily / single family properties for cash flow, but I would welcome investors from all backgrounds to chime in!
The 5 year test.
Will this dirty unit, person , drama, problem or amount owed me matter in 5 years? Probably not. Don't dwell on it. It will kill ya.
Will this asset put me in a better place 5 years from now? If not, sell it or don't buy it.