Why Time in the Market Teaches More Than Any Course

Question

One thing I’ve been realizing more as I spend time analyzing deals is that experience compounds in ways that are hard to replicate.

You can study numbers, watch videos, and read books all of which are valuable but actually reviewing real properties in real markets teaches something different.

After looking at enough deals, you start to notice patterns:

• What realistic rehab costs look like• How different neighborhoods affect value• When a deal feels “off” even if the numbers look okay• What buyers in your market actually respond to

It’s not something that happens overnight. It builds gradually.

Even deals you pass on end up being part of the learning process.

For those further along, what helped you build confidence early on?

Was it taking action quickly, or spending more time analyzing before jumping in?

Doug Smith · Answer

I totally agree. The learning curve is exponential...even if you think you know what you're doing. I started in an odd way. I was a lender/banker for close to 20 years before I did my first flip or bought my first NPL. Because I had funded tons of flips and ground up spec homes, I thought I had the process down. Because I had worked as a commercial lender and worked in "special assets" for a bank, I thought I had commercial NPLs down cold. Then, when I started this company, I made several mistakes in the first few deals we did. What really shocked me what when I started speaking at industry conferences, I discovered few of the "gurus" and many of the larger fund managers had zero background on what they were doing or selling. I quickly learned to take what I had learned in my career and they surround myself with people that truly knew what they were doing. I partnered with people that were pros, not gurus that teach at the Holidome over the weekend. They learned from me and I was a sponge to learn from them. After 35 years and a bajillion deals (actual number...look it up), I am still learning every day. I've learned that if you have something to bring to the table like a GC license, capital, the ability to source property, etc, experienced people that you want to learn from will want to work with you. The relationship is not only symbiotic, but experience then starts to transfer. I see a lot of newer people on here not realize that. Step 1, figure out what you bring to the table. Step 2, ask yourself what you lack. 3) Step 3, really research those that you think you can learn from to make sure they are for real. 4) Step 4, work with those people and be a sponge. For what it's worth, that's my advice. Great post Louis.

Kenneth Garrett · Answer

@Louis Wisinski

It’s all a giant learning curve.  You need confidence to evaluate properties and become good at it.  You don’t need to be great, just solid.

Pulling the trigger and buying an investment property teaches you more than any potential deal ever will.  You can analyze forever, but paralysis will stop you from ever starting.

The greatest asset after purchase and stabilizing a property is time in the market as with any investment.  Over time properties appreciate as well as cash flow.  Buying the correct properties and over time you will become a multi-millionaire.  It doesn’t take hundreds of properties.  5-10 good buys will take care of you for life.