When is enough enough? How many homes does one need!?

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When is enough enough? How many homes does one need!?

David S.
Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes

Perhaps I have an inner socialist I’m not aware of, but I have to ask the community, when is enough enough as it pertains to number of units owned?

How often they ask on the podcasts “where are you going from here?” And the answer is something like “oh, we plan to have 500 doors” or 1500, or whatever. To me that qualifies as greed if I’m speaking honestly. Why on earth would you want so many units!? I can see it if they’re lower income apartments and/or you’re syndicating, bit that’s not what I’m talkig about here.

Another case in point; Invitation homes. 82,000 units they own and rent! Ridiculous. 

The world would be a better place (I’d argue) if so many weren’t trying to commoditize or hoard everything. Honestly, that’s 20,500 families who could otherwise gain substantial financial stability through owning four rental properties each. I hate the concept of “fairness” and all that is embodied by socialism, but at some point this sort of behavior shoud fall under antitrust laws and be illegal. At some point I’d think that there’s a reasonable (high) standard of living and anything beyond that is just sheer excess. It’s as if we as a society don’t want a solid middle class. Why not step aside at some point and let the next guy have a little easier time of it? Seems the right mentality. 

Is it just me???

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Anthony Dooley
Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
8y

@David S. if you feel that being very wealthy automatically makes someone greedy or evil, then it is highly unlikely that you will ever achieve wealth. So, you don't have to worry about how much is enough because you will stop sooner than later. For me, being very wealthy means security from evil and greed. I do not have to be a victim of someone else because wealth give me choices. If at some point I gain so much wealth that I cannot possibly spend it, then there isn't much else to do except give lots of money away. The super rich don't just give money to charity, they start charitable foundations. You will have a hard time finding wealthy people who don't give. You can't give what you don't have, so being poor is not more noble. Socialism only benefits the government, not the people.

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  • James McKay
    Ca presently NV 2019 · Member since 2018 · 8 posts · 7 votes
    8y

    I like this type of question. It makes for interesting conversations, and gets some people riled up. 

    Take it out a little further. Warren Buffett (according to his 2017 estimated net worth) could give $59,000 ea (2017 median income) to 1,388,000 people and have change left over.

    Of course, most of those people would just blow it on new phones and internet shopping. 

    TANSTAAFL 

    6Reply
  • Leon Li
    Rental Property Investor · Bothell, WA · Member since 2018 · 76 posts · 37 votes
    8y
    @David Smit Once you reach that wealth level you will understand. Why does Bezos continue to work so hard to achieve new heights, why did he buy whole foods, and now healthcare company and blue origin to go out of space? Conquering mars and reaching his ultimate goal maybe? World domination or maybe God complex. Who knows. Everyone has different goals.
    2Reply
  • Anthony Dooley
    Investor · Columbus, GA · Member since 2014 · 2k+ posts · 1k+ votes
    8y

    @Larry Turowski the article doesn't support your statement. Besides, 2% of a million dollars is a lot more dollars than 4.6% of $20,000. Just saying. The poor cannot out-give the rich. So, if someone wants to make a difference in the world, being rich has s bigger impact.

    4Reply
  • David S.
    OP
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @Larry Turowski @Anthony Dooley I don’t think 6% is much at all frankly, that only supports my thinking! When you only need a small fraction to live a very nice life (speaking of the upper half of “rich”) you’d think those numbers would approach 50%. That’s an average too. For every one who gives a lot there’s another who gives little to nothing in effect. I’m hoping that’s at least pre-tax dollars. 

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y

    I got content and was happily working on how to 10x a nap for the foreseeable future. No more self help, getting up earlier to do do do more. 

    Then a friend called. His brother committed suicide last year. The house is through probate finally and ready to sell but needs too many repairs for a bank to lend on it.  He doesnt want it flipped by a stranger to a new stranger. Can I take a look?   

    I obviously don't need (or hardly even want) another stupid house, but a buddy needed help. I overpaid by $5k because he could use it.  I have renters ready to go that really need a place.  

    Yeah, it was a good deal for me. Capitalism just helped 2 families a lot and one family (mine) is letting his kids explore construction a bit.

    I do get what you mean, the question of what drives others to continue acquiring, to continue working and driving themselves?  That's a personal choice and not one I subscribe to personally, but to each their own.  

    Most of the wealthy I know give a lot and are very generous.  The broke and struggling can't give to that single mom or grant mercy to a tenant.  

    Maybe the 10Xers are all Lion personality types with Power (self-accomplishment) as their highest basic need.  I'm just a Lab Retriever that enjoys Freedom.  Personality types play a huge role in the 'enough' discussion.

    14Reply
  • John Patterson
    Contractor · Canton, GA · Member since 2015 · 107 posts · 81 votes
    8y

    What is successful greed today could be a collapse tomorrow.

    Real Estate has many variables when it comes to deals. Eventually, there will be a drop in MF. Every business has it. There will be demand in other areas, though. Look at the different facets  beyond banks and realtors. Success lies in the cracks and unknowns in  business. Seek , be creative, and find your niche. If you follow the hype train, it’s going to either derail or Come to a complete stop when it runs out of gas.  

    If you think deals are not there, open your door and see how many homes and buildings file in your line of sight. It’s in the people that a true value is found , not in the house , building or facade. It’s in the relationship between seller and buyer, and renter and landlord. Nobody is forced or conned ,typically. These are services provided to fill a need, and thankfully the government doesn’t create on a mass scale or most of us would be living in cargo containers. 

    Last, Houses don’t sign papers or checks at a closing. People do. 

    1Reply
  • Courtney M.
    Lake Elsinore, CA · Member since 2018 · 235 posts · 300 votes
    8y

    This is an interesting question. There are certain companies that operate this way. For instance, I live in California and The Irvine Company owns and controls large swaths of real estate in Orange County. The owners are some of the richest people in our country. And yet - they control the real estate in one area of the country. They haven't gone out and tried to dominate real estate nationally. 

    There are very few people with the skills, acuity, desire and money to try to attempt something like investing in real estate. In looking and my family and friends, all of the people I know, I do not know a SINGLE person who is looking to invest in real estate. It's not because they are stupid, and I also have friends who have pretty substantial incomes. For many there is not a desire. It's a truly oppositional way of thinking.

    I certainly don't knock ambition or capitalism. I do have issue with the fact that those who are hugely successful can have an outsized impact politically (but that's an entirely different discussion...). I agree with some of the other contributors here that those who are hugely successful, like Jeff Bezos, etc., are motivated much differently than the rest of us. I think I'll be happy with a certain number of properties, I'm not looking to become the next hot syndicator. 

    One thing I find interesting, that is not quantifiable, is luck. At one point Google was on the market for a paltry sum, and the investment community turned them down. Had they been sold, we wouldn't be hailing them as geniuses. Hard work is absolutely in the equation for success but there's no doubt luck and circumstance play a role.

    3Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    8y
    Originally posted by @Larry Turowski:
    Originally posted by @Anthony Dooley:

    @David S. if you feel that being very wealthy automatically makes someone greedy or evil, then it is highly unlikely that you will ever achieve wealth. So, you don't have to worry about how much is enough because you will stop sooner than later. For me, being very wealthy means security from evil and greed. I do not have to be a victim of someone else because wealth give me choices. If at some point I gain so much wealth that I cannot possibly spend it, then there isn't much else to do except give lots of money away. The super rich don't just give money to charity, they start charitable foundations. You will have a hard time finding wealthy people who don't give. You can't give what you don't have, so being poor is not more noble. Socialism only benefits the government, not the people.

    According to this article,  https://www.financialsamurai.com/the-average-percent-of-income-donated-to-charity/, the super rich give about 6%.  After them, the poorest give the greatest percentage. 

     First, I have always been frustrated by these articles.  I've always believed that they were based on limited knowledge that those that donate allow.  I always revert back to the movie Brewster's Millions.

    Second, and this is another example of misleading results when percentages are used instead of dollars.  If a Millionaire, with an income/year of $50k gives only 10% they are giving $5,000/year.  If someone only making $100,000/year gives 7%, they are giving $7k/year.  If a person making $1M gives only 3%, they are giving $30k.

    Now, which person is giving more?

    4Reply
  • Bryan Clement
    Rental Property Investor · Union, ME · Member since 2018 · 161 posts · 104 votes
    8y

    This is where personal preference comes in. Some people just don't want to do the "landlord thing", because it's too much hassle. Also, the Sherman Anti-Trust act is only enforced when on or two companies control the entire market. Real Estate is so widespread that those laws will never be a player in this game (one of the reasons why we all like this game so much!) Also, with Socialism, it doesn't change the fact that the poor exist. In our country, the rich are capitalists, and the poor are employees or the unemployed. In China and Russia, the rich are government bureaucrats. It doesn't changes the unfairness of the system, just redostributes power to a different, socially elite group of people.

    2Reply
  • Account Closed
    Rental Property Investor · Torrance, CA · Member since 2016 · 724 posts · 1k+ votes
    8y
    Some people like winning more than being comfortable. Personality I want to become as wealthy as possible. Why? Why do people climb Mt Everest? Because there isn’t anything taller. If there was they’d climb that instead. Like Steve Vaughan said, it really comes down to personality types. I’d bet most people climbing Mt Everest are disproportionately wealthy. That kind of person attracts wealth.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Anthony Dooley:

    @David S. if you feel that being very wealthy automatically makes someone greedy or evil, then it is highly unlikely that you will ever achieve wealth. So, you don't have to worry about how much is enough because you will stop sooner than later. For me, being very wealthy means security from evil and greed. I do not have to be a victim of someone else because wealth give me choices. If at some point I gain so much wealth that I cannot possibly spend it, then there isn't much else to do except give lots of money away. The super rich don't just give money to charity, they start charitable foundations. You will have a hard time finding wealthy people who don't give. You can't give what you don't have, so being poor is not more noble. Socialism only benefits the government, not the people.

     ERGO exactly why we started aheroshome.org.. something for BP members to donate to even a little donation and know that 100% is going to this great cause.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    5Reply
  • Will Karstetter
    Rental Property Investor · Tulsa, OK · Member since 2017 · 41 posts · 34 votes
    8y

    Setting artificial goals based on the number of doors a person owns is a recipe for unfulfillment.  Goals should be based on cashflow or net worth. I hate the idea of romanticizing the idea of someone owning a large number of units or doors when someone else could own half as much, make more money, and have a less demanding workweek. 

    To address your point, no I do not fault investors for exploiting their full potential. Instead we should applaud and study these companies / investors who have managed to build such great portfolios (again going back to number of doors). We can learn a lot from them and one day become like them - if that is your goal. If not, reach your goal and be happy with what you have accomplished. 

    Anyone else feel the same way as me; cashflow / network goals > door goals??

    2Reply
  • Valerie K.
    Trabuco Canyon, CA · Member since 2018 · 26 posts · 16 votes
    8y
    @David Smit- the beauty of capitalism is that it isn’t a zero sum game. Whether you own 2 or 2,000- your ownership has not in any way denied another of their opportunity to do the same. It seems that in your heart your real concern is unequal outcome. Unless you want socialism and wealth redistribution, keep working hard and let others do the same. Maybe someone else doesn’t have the means to get the ball rolling? How to fix that I don’t know- lots of people have made a fortune with grit, resolve and little else. You can’t force people to dig deep and use those, nor should you apologize if you are successful. As long as you aren’t directly preventing someone else from having a chance, I don’t see the problem.
    7Reply
  • David S.
    OP
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @Will Karstetter I certainly agree with the notion of CF over doors as should everybody. My intention is to acquire x number of doors only because i want a simple life without employees and endless go go go. Suspect that number will be around 20-30, but I’ll always be a seller of a property that underperforms the portfolio. I just sold my very first and only rental for this reason; it came with 20 acres of land. Was a great purchase, I had to rent it for some unique tax reasons but now it’ll become two rentals without acreage for roughly the same price. Amazing how many people think I should hold onto it because it’s “cute” or historic. Nothing cute about it when you’re the landlord. I’ll take CF instead please.

    0Reply
  • Will Karstetter
    Rental Property Investor · Tulsa, OK · Member since 2017 · 41 posts · 34 votes
    8y
    Originally posted by @David S.:

    @Will Karstetter I certainly agree with the notion of CF over doors as should everybody. My intention is to acquire x number of doors only because i want a simple life without employees and endless go go go. Suspect that number will be around 20-30, but I’ll always be a seller of a property that underperforms the portfolio. I just sold my very first and only rental for this reason; it came with 20 acres of land. Was a great purchase, I had to rent it for some unique tax reasons but now it’ll become two rentals without acreage for roughly the same price. Amazing how many people think I should hold onto it because it’s “cute” or historic. Nothing cute about it when you’re the landlord. I’ll take CF instead please.

    I agree with that notion as long as the property you're selling has some equity. I would hate to offload a property that is a double, just because I have several other homeruns. The name of the game for me is DSCR and all equity plays are immediately put up for sale. Right now I doing exactly this - selling a six plex that my partner and I have a large amount of equity in because even at this properties peak, It cannot come close to our other assets.

    0Reply
  • David S.
    OP
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @Valerie K. Not at all, life isn’t fair to begin with and I hate it when people assume it ought to be. With regards to creating wealth equal outcomes are a terrible terrible idea as that breeds entitlement. I do however wish that mankind’s mentality was geared a bit more toward the common good rather than so focused on personal achievement. I cringe when I see a strong emphasis on money and wealth and materialism, epsecially when a person already achieved so much in that department. Life is fleeting and you can’t take any of it with you. 

    For that matter why is it that everybody on average still works just as much if not more as we did 40 yrs ago? We’ve achieved so much and yet we have to work just as hard to attain a similar standard as before ( if not harder). We ought to be working four day weeks by now relatively speaking, but the efficiency has only benefitted an extreme income distribution that favors the very top earners. That doesn’t mean I want socialism, I just find this to be a very unfortunate trend for the masses who are working very hard.

    3Reply
  • Charles M.
    Montgomery, AL Investor · Member since 2018 · 171 posts · 56 votes
    8y

    Good lord this a lot of reading 😂

    3Reply
  • David S.
    OP
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @Will Karstetter About 60% equity. We’re on the same page for sure. Good luck sir! 

    1Reply
  • David S.
    OP
    Rental Property Investor · Larkspur, CO · Member since 2018 · 198 posts · 179 votes
    8y

    @Charles M. I took a few well deserved days off! Dangerous 

    0Reply
  • Account Closed
    Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    8y
    Originally posted by @David S.:

    @Valerie K. Not at all, life isn’t fair to begin with and I hate it when people assume it ought to be. With regards to creating wealth equal outcomes are a terrible terrible idea as that breeds entitlement. I do however wish that mankind’s mentality was geared a bit more toward the common good rather than so focused on personal achievement. I cringe when I see a strong emphasis on money and wealth and materialism, epsecially when a person already achieved so much in that department. Life is fleeting and you can’t take any of it with you. 

    For that matter why is it that everybody on average still works just as much if not more as we did 40 yrs ago? We’ve achieved so much and yet we have to work just as hard to attain a similar standard as before ( if not harder). We ought to be working four day weeks by now relatively speaking, but the efficiency has only benefitted an extreme income distribution that favors the very top earners. That doesn’t mean I want socialism, I just find this to be a very unfortunate trend for the masses who are working very hard.

     Your comment: "I just find this to be a very unfortunate trend for the masses who are working very hard." Yes, that issue was solved by Lenin in Russia in 1917. Everybody owned everything. The common joke was "We pretend to work and they pretend to pay us". ;-)

    On a more serious note, in answer to your thesis, This article just came out:

    "Roughly 43 million American households have opted to rent rather than buy their homes because of convenience, cost or both."

    https://www.biggerpockets.com/forums/311/topics/59...

    2Reply
  • Clifford Paul
    Rental Property Investor · Member since 2018 · 483 posts · 956 votes
    8y

    Shouldn't the question be "how much money does one need"?

    It's a trick question to be sure. One person's life and goals is not the same as another's. 

    For example I'm a car guy. I love car's and I'm sorry but a 10 year old Prius doesn't do it for me. I'll drop 100k on a car in a heartbeat if it's what I want. As a car guy we get it, not everyone likes car's and they only see them as a means to get to point A to B. There's nothing wrong with that either. We car guys are miss understood for sure. Even on BP you are looked down on for driving a car worth more than 5k. Some how this isn't being smart with your money and you could be buying more door's. Once you made it... You don't need more door's!

    I made 10k in the last 24 hours. Bought 2 flops on Friday and my agent sold them today for 5k profit each. If people can't find a way to make it in this life why should I pay for their failure? I have a freaking GED and work 2 jobs for 20 years and made smart investments to get here. No house I ever bought keep anyone from buying or becoming successful. 

    My local Corvette club members donated over a million dollars last year to local  charities and it will be more this year. We donate anonymously so no one even knows what we do. We're fine with that.  

    I personally don't need more door's I'm crushing it with less. I don't need more money because I made it through hard work and more hard work. Large companies buying thousands of houses is not going to hold anyone back. The lack of action and work ethic is the only thing holding people from success.

    6Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    8y

    @David S.

    I am certainly in agreement with you. This is the core reason why I and a few concerned colleagues started McRib International Seminars. MIS focuses on wealth appetites for ordinary individuals, not catering to the relentless greed and cupidity of a few superrich. This is indeed why we took the simple, perhaps even common, McRib as our signature sandwich mascot/limited-availability dining experience.

    We will help you unlock your inner potential to achieve your goals with humility and your established limits firmly in mind. No soaring dreams of greatness for us -- what we seek is a synergy of your spiritual and economic well-being all in a reconstituted frame of mind that allows for controlled money management. We understand your needs are few and your economic well-being is all that you seek, rather than empire and hoarding. What you really want, boiled down to its simplest terms, is to go up to the second window and have them pass out a bag with two tangy flaked and formed pork sandwiches in it, and no need to go for the extra value meal to get a deal. Is that too much to ask? We think not.

    But you must act quickly. There is limited availability. The chairs at our next inspirational 3-day seminar are filling fast. This is your moment to act, to reach out and grab a handful of reconstituted meat/economic opportunity/knowledge and power. Come take a meaty yet saucy bite out of your best life.

    3Reply
  • Albert Ng
    Rental Property Investor · San Jose, CA · Member since 2015 · 401 posts · 221 votes
    8y
    @David Smit Coming from a communist country, I can tell you that socialism sounds great, but doesn’t work at all. Human are greedy, and it’s what drive us to work, invest, come up with new & better things, ... When house are given for free, or sale at a cheap price, no one will work hard to get one. No one will rehab, redevelop, or build new houses. And soon, the society will run out of house to distribute to every family. Take Greece as an example. They less gredy, and most retire at an early age. Then they get in trouble because of too many retirees and not enough people working.
    4Reply
  • Chris Szepessy
    Catskill, NY · Member since 2018 · 636 posts · 668 votes
    8y

    I work with a guy who is a hardcore socialist. One day we got talking and he said "we need to help less fortunate people." I said "Ok, sell your $150,000 house and buy two $75000 houses and GIVE one to the homeless guy in the park." He just looked at me and that was the end of the conversation.  You can give a million dollars to every person in the US, and in one year, the rich (and those who aspire to be rich) will be wealthy again, and the poor will be poor again. Not everyone wants to be a LL, not everyone wants to be out of the rat race, not everyone wants to work hard to become rich, etc. Everybody has the same opportunity to become wealthy in the US. Yes, certain people may have a better start, but nothing stops someone from working hard to get what they want. I can't believe that people are criticized and penalized for doing well in life. 

    12Reply
  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @David S. Your question is an important one to me, but more for personal reasons than policy reasons.  i'm a Christian and it is important for me to check my motives every day.  But that is entirely personal.

    5Reply
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