MILLIONAIRE Mindset Vs. None-MILLIONAIRE Mindset

MILLIONAIRE Mindset Vs. None-MILLIONAIRE Mindset

Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

On the BiggerPockets website everyone has an equal voice. An equal opportunity to read and post as anyone else (as long as the poster follows the BP posting guidelines of course - which is understandable).

I have learned from people much wiser than I to be selective in the advice and opinions I listen to. Specifically I have been taught to read, listen to, and associate with the people that I admire or would like to become like.

I have been reading a recent post about all the negative aspects of real estate investing and how most investors really lose money and the ones that talk positively about investing in real estate just want to sell you their book or get you to listen to their podcasts where they get paid by their advertisers. 

Because everyone has an equal voice on BiggerPockets I wonder if all of the posts on here bring up the below average investor’s mindset but also bring down the above average investor’s mindset. I’m not advocating limiting the posts to only those people who are wealthy standing in a room talking about their real estate, but boy would I like to be a fly on the wall in that room soaking up only the real keys to success rather than listening to or reading the opinions of people who are below average investors.

I don’t mean to sound like an elitist, I am just wondering if anyone else has felt the same way.

6Reply
215 views

Most Popular Reply

Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
8y

I know the post you are talking about, and I recognized it as a lot of jadedness, but as someone who has dealt with most of what he was bitching about, I saw a lot of grains of truth to it.  

On the other hand, I dont really buy into the "above average investor" talk or "millionare mindset" stuff. But, thats because I know my personality is different from the people who say that sort of stuff.  

I'm not a wheeler-dealer transactional type. Those types of people are kind of like an "engine" that needs constant fuel to keep that energy going. Realtors, flippers, wholesalers, etc, who complete a project and then need to hurry up and find the next thing. 

For those types of people, they need the optimism and encouragement, and to keep a positive outlook.  Those are the sorts that think in terms of their mindset and if they are an above-average investor.

For me, I'm a bit deeper in the mud. I think the transactional types look down on people like me. I self-manage, I do as much of my own work as I can, I hunt and hunt and hunt until the "right" deal comes along and then I pounce aggressively. I know exactly what I'm looking for and I know what I'm going to do with it when I get it.  Also, this isn't my day job, this is me trying to aggressively (but patiently) build wealth for myself using the tools and resources I have.   

I think the guy that wrote that post is a lot like me, in that the non-transactional types dont entirely trust the transactional types because we know they just want to do some sort of deal and move on.  We're also in the mud so we get a lot of mud on ourselves. 

That leads to some jadedness. I've thrown more than one shady contractor off my property. I think most realtors are complete bozos. I dont trust anything anyone tells me in terms of numbers. I think scammers and corner-cutters are everywhere in REI. I think the up-talkers/book-sellers are selling fuel for those that need it for their "engine." I dont.

I really identified with that post and voted it up. But I will keep on doing what I do because I've done it long enough now to know my method is working.   

I'm not sure if I really addressed what you were asking, but there's just so many different personality types and different ways to success in REI that it makes sense there will be disagreements and clashes on the softer stuff, like outlooks and mindsets.

See this reply in the discussion

51 Replies

Jump to latestLatest
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Andrew Johnson  just to set the record straight I lost about 5 million in cash and equity from 08 to 2011.. that is a fact.. now the good news is.. the way I did my tax's I could go back 5 years and get almost all of my tax money back .. so from 2008 to 2012 ish I paid no tax on income as I climbed back out.. and I was getting 6 figures refunds from uncle same  LOL.. but I would have preferred not to get Hammered like I did.. but the thing I am most proud of.. Is EVERY vendor Every lender Every bank got 100% paid and I even had to bail out two builders that went bust o on me and I had to step in to protect my good name. 

    It was not pleansant and loss's were in all asset class's..

  • Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    8y

    @Jay Hinrichs That's another fun point that doesn't really get brought up in forums.  Once you start messing around with tax benefits for a real estate investor it's materially different if you make $40K/year or $400K/year.  At least that's my perspective.  Something going sideways and generating a carryover loss would suck for me but I'd reap some tax benefit from it.  It wouldn't be the end of the world.  Life would go on.  The newbie making $40K a year trying to leverage their way into something won't likely have the same "well that sucks" reaction to a loss.  It would probably hurt, push them close (or into) foreclosure, etc.  

    Maybe it wouldn't, I don't know. It's just scary for me to see some of the risks new REI investors are happy to take. That credit cards can be a substitute for reserves, etc. But what do I know...

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Andrew Johnson  Frankly the only way I made it through was significant liquidity.. if I had been like all these 80% debt or 80% debt and then helocs for rentals.. I would have been toast. just sayin.. but then again I am not predicting another wipe out like that.. at least I hope to god no one has to go through that pain like we went through.. cutting 50 to 100k checks to sell something to make your bank happy is no fun..

  • Real Estate Investor · Milford, NE · Member since 2011 · 201 posts · 140 votes
    8y
    Originally posted by @Jay Hinrichs:

    @Andrew Johnson  just to set the record straight I lost about 5 million in cash and equity from 08 to 2011.. that is a fact.. now the good news is.. the way I did my tax's I could go back 5 years and get almost all of my tax money back .. so from 2008 to 2012 ish I paid no tax on income as I climbed back out.. and I was getting 6 figures refunds from uncle same  LOL.. but I would have preferred not to get Hammered like I did.. but the thing I am most proud of.. Is EVERY vendor Every lender Every bank got 100% paid and I even had to bail out two builders that went bust o on me and I had to step in to protect my good name. 

    It was not pleansant and loss's were in all asset class's..

           As far as I'm concerned this post explains one of the most important aspects of running a successful business and making folding money.

    "EVERY vendor Every lender Every bank got 100% paid and I even had to bail out two builders that went bust o on me and I had to step in to protect my good name."

        Do what you say you will do, no matter how painfull it becomes. DO NOT  throw the people that help you in business under the bus when times get tight.   

           At the end of the day all we really own that is all ours is our reputation and word of honor.  Our good name. 

  • Investor · Detroit, MI · Member since 2014 · 360 posts · 354 votes
    8y
    Originally posted by @Ann Bellamy:
    Originally posted by @Christian Hutchinson:

    All season investors buy SF and 1-4 unit properties with a 3-7 year plan, and get out strategy, at different points. Another dead giveaway of the newbie's that have listened to podcast and read tons of blogs, are they view property and tenants as someone separate.  Property is the product and tenants are consumers. Your buying the property for a certain consumer in  particular market.

    Well, I disagree with that first statement.  The truly wealthy families never sell anything.  I myself just sold a 4 unit I'd had for 20 years, but 1031d into another deal because I want more passive investments.  So it's simply not accurate that all seasoned investors buy small properties with a 3-7 year plan.  

    I don't have any issue with the negative post that we are referencing, for 3 reasons:

    1.  That's his reality, and it's probably always going to be his reality.  Maybe if he writes it out, someone will make a comment that will change his mindset.  Probably not, but you never know.  But worth a shot.   It sounds like he drank the kool-aid (believed all the gurus) and then was surprised when it was poisoned.  (If you don't understand this reference, congratulations on being much younger than I am, and google Jim Jones Guyana Jonestown)

    2.  I get calls from lots of people on BP about hard money.  Seeing their posts helps me understand their experience level and their attitude.  

    3.  We all have to filter who we take advice from, and make our own decisions.  Seeing that post helps me make that decision.

    I think you misunderstood what I was saying. Maybe its the market I'm in. I know some people with 8 figure net worths and easily $5m-$25M liquid at anytime. You always go into an investment looking for the long haul. Because rents and values are just exponentially better historically in Y10 versus Y3. But to enter into any investment and not have an exit strategy is unwise. I've had some very rich and knowledgeable people tell me that. Wealthy people try to mitigate risk at all times. So yes they will invest in a NNN lease with a National Drugstore Chain at 5-6% return with their $2M for 20 years with 10 year escalator. But most people don't get starts with 7 or 8 figures to invest. Your average person starts out with $20-$200K. They need some trial and error, hit some doubles, singles, maybe strike out a few times. Then they build up enough of a portfolio that they make that "keeper" purchase. Or they are like some people during the most recent recession got a steal of a lifetime (I know someone who bought a home valued at $700K now for $165K in 2009, he rents the home for $3000/mo too)

    Typically in about 7 years you get a feel for what condition the house is in, what has to be replaced, where the neighborhood is going in terms of values and rents.  Also, by that point you should have made your 2x-3x money back and then some in terms of cash into the investment.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Sean Kremer  its one of the reason for my success the last 5 years.. my bank backed me all the other builders or developers who handed in the keys are out there borrowing hard money.. I borrow money at 5 to 6% on drawn funds.. my competition in the Portlandia market was paying 12 its gone down to about 10.. but on 300 to 500k a loans that's a significant number and increase to the bottom line for the exact same product..

    My one bank who stuck with me also has given me two horizontal loans.. STreet sewer water etc. and in our market here those are super hard to get.. this again has given us the ability to buy dirt and create our own inventory instead of competing for spot lots on the open market..

    But again sometimes if it gets so bad like 08 to 2010 some folks simply had no choice they did not have the means to cure and BK was the only option or walking away..

    Also lets keep this in context I am just a one man small builder.. we will do 30 to 35 homes this year.

    in a market like SOCAL that is a hobby  LOL..

  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    8y

    You're looking for a mastermind group and you won't find that in a free public forum.  But you can find potential members.

    It's imperative and life changing to be surrounded by the right people.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Mike Dymski  I never did understand what a mastermind group was.. I always thought it was some secret society or a bunch of Wharton grades or MIT PHD's  :)

  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    8y

    @Jay Hinrichs it was until us public got a hold of it and started amateur-mind groups...

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Mike Dymski  OK I think I fully qualify for the amateur mind group.. sign me up.

    but really I would see these pictures of these late 20s kids that were in mastermind and wonder those guys must have 180 IQs or something. :)

  • Real Estate Investor · Milford, NE · Member since 2011 · 201 posts · 140 votes
    8y
    Originally posted by @Jay Hinrichs:

    @Sean Kremer  its one of the reason for my success the last 5 years.. my bank backed me all the other builders or developers who handed in the keys are out there borrowing hard money.. I borrow money at 5 to 6% on drawn funds.. my competition in the Portlandia market was paying 12 its gone down to about 10.. but on 300 to 500k a loans that's a significant number and increase to the bottom line for the exact same product..

    My one bank who stuck with me also has given me two horizontal loans.. STreet sewer water etc. and in our market here those are super hard to get.. this again has given us the ability to buy dirt and create our own inventory instead of competing for spot lots on the open market..

    But again sometimes if it gets so bad like 08 to 2010 some folks simply had no choice they did not have the means to cure and BK was the only option or walking away..

    Also lets keep this in context I am just a one man small builder.. we will do 30 to 35 homes this year.

    in a market like SOCAL that is a hobby  LOL..

        08 stung for me too.......I got real lucky and was low on inventory, but now I have a few real nice homes that were intended for sale in 08 that are making damn good returns now for me as rentals.  08 was scary.

        My wife and I are getting ready to break ground on a pair of 11 home culdesacs in our little town here.

       Sounds like you and I are not doing too bad as 'one man small builders'.............:)   

         Not only that but it is real nice to be able to call ones banker at odd hours of the morning for bail money.. :)   You can't do that if you don't pay all your bills on time.        

  • United States · Member since 2015 · 401 posts · 394 votes
    8y

    While I agree that not all advice holds the same weight - you don't want to take flipping advice from the guy who only buys and holds stabilized properties, you don't want to learn how to wholesale from the girl who's only wholesaled one property in the two years she's been at it, etc - I firmly believe that vetting the information you find on this site is entirely up to you. You need to do your research, decide who you do and do not trust, and be fully confident in YOUR choice when deploying actions recommended by someone in the forums (nobody is forcing you to do anything).

    This site was made for one reason - as a resource for EVERYONE who wants to succeed in REI. There was no requirement when signing up that your bank account include 6 figures. Nobody said that you have to be a newbie to join. And most of all, nobody promised that all representations on this site would be 100% true and verified.

    I guess my point is that everyone is at different stages in their real estate endeavor. Some people are scammers, some are true and genuine, some or here to sell something, some are here simply to offer advice they've accumulated over a very long and successful career, but most of us are here to learn from each other. So, I don't think it's fair to pigeon hole and shame the "newbies" who, for the most part, have genuine intentions. Might that include some ill informed posts sometimes? Sure. But what better way to learn than by being corrected by a seasoned vet.

    Let's help each other out in whatever way we know and ensure that those seeking advice or learning opportunities are protected from the scammers or ill informed. Let's not discount others opinions or REI path because it doesn't align with our own. Let's not discourage those just getting started in REI for fear of being shamed for being incorrect, and instead support their ambitions by offering truth and evidence/experience of such.

  • Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
    8y

    Go read the book's (Rich Dad Poor Dad, The Cash Flow Quadrant, The Richest Man In Babylon, Tax Free Wealth, and Cold Hard Truth by Kevin O'Leary). You will then get a good start of the mindset of what millionaire's look for, how they use other peoples money and leverage, and how their minds analyze deals. Systemizing, creating businesses, investing,  using the tax code to its max advantage and investing where the government provides incentives and deductions. Have your money work for you, and your money's money. 

    @Shiloh Lundahl I think I read that same negative post. Don't let naysayers discourage you. Just do your homework, crunch and stick to your numbers. Build a good team to surround yourself with, and create checks and balances with your team members. 

  • Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    8y

    when i had cancer it use to p#ss me off when people would tell me to just " think positive" and " fight hard" and everything will be okay. Magical thinking is ********. Plenty of people fought hard and kept a positive outlook right up until they died. Plenty of people will work hard and do smart things and still not end up rich.  Don't discount the role of lady luck and the huge infrastructure investment paid for by your fellow taxpayers including your tenants in your success or you'll just end up an arrogant magical thinking *** 

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    8y

    @Shiloh Lundahl Life, in it of itself, is largely dependent on an optimist mindset. Imagine we all woke up every day thinking we wouldn't factually make it through the day, I'm sure no one would leave their houses. 

    I read the post you are referring to, and undoubtedly, the post has some validity to it, that said, I just think the delivery could have been better. 

    As for your post, I love what @Michaela G. said, these negative people will come and will go. I suppose that is the price we pay as BP members. 

    Ironically, some investors forget the meaning of an investor: 

    in.ves.tor

    noun

    "a person or organization that puts money into financial schemes, property, etc. with the expectation of achieving a profit."

    Fundamentally, there is a hidden meaning to this definition. If you start out as a pessimist not expecting anything to go right then that is going to happen. Folks come on here for a variety of reasons, and I think those who decide to post should always seek to add value: solving a problem AND/OR making people feel good. There is a lot of sorrow in the world why add more to it. 

    Any investor destined to thrive must have superb discernment, so that way, one is able to quickly sought through great mindset and below average mindset type posts. 

    Hope this makes sense, Shiloh. Goodluck. Thanks! - Ola 

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    I want to thank everybody for the time and effort they put into their posts on this thread. I think there has been a lot of great perspectives shared and I really appreciate it.

    @Mindy Jensen It took me a little while to figure out what the double comma club is... but then I figured it out. I don’t know if you made up that phrase, but I like it. I also liked the perspective on the importance of seeing the other side of investing; the loser side if you will. Not “loser” as in uncool, but as in someone who loses things such as money, faith in humanity, optimism, trust in people, etc. all of which is very possible to do when deals go bad in real estate. Thanks again for your comments.

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @JD Martin Thanks for your post. I too believe that I am a smarter investor having listened to the podcasts, read the different articles, and interacted on the forums here on BiggerPockets over the past 2 years.  

    Also, what a great perspective in getting familiar enough with the people who contribute to the forums, or articles, or podcasts that you start to recognize people who are experts in their fields, or at least know very well what they are talking or writing about, and learning from them.  

    Thanks for your input. 

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @Llewelyn A. I really appreciated your post, and I highlighted it, and had Siri read it to me several times to gleam all of the great principles from it.  So thank you.

    I think that I fall into the category that you mentioned of individuals who have not invested through down turns.  Even though my business parter went through the down turn in 2008 and went from being a millionaire to being 250k in debt with no assets, I have not experienced that myself.  But he does reign me in when he thinks I am going crazy or am being overly optimistic with a deal.  I can definitely say that most of my success over the past 2 years has come from this partnership/friendship.

    So I guess we will see what tune I am whistling in the next down turn.  Hopefully, I have learned from enough from people who have experienced a down turn that I have stabilized my real estate holdings enough to the point that I can take advantage of the opportunities that present themselves.  Thanks again for your post.   

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @Andrew Johnson Thanks for your contribution to the thread.  I do recognize the down side of real estate... I have experienced it a little myself.  I do think that it is important to know that the risks are very real and that when someone makes a mistake, they not only could lose the money they put into a deal but they could possibly lose more than what they put into the deal as you mentioned owning more money than the property is worth.  So yes, it is important that there are posts that share that in order to get a balanced perspective.  So thank you for pointing that out.

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @Jay Hinrichs Starting this post was worth it to hear your come back story.  

    More than success, I value integrity.  And to hear or see people who make good on their word even when so many others were doing what they called "strategic defaults" in order to get the most out of the financial melt down while releasing themselves from the responsibilities of their debts, makes me admire you even more.  Also, I want to you know that I have taken into consideration other posts that you have written about not being too over leveraged and I am working on stabilizing my portfolio this quarter before I continue to grow.  So thank you for your advice and example.

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @Mike Dymski You are absolutely correct.  I think what I am looking for right now is a mastermind group.  I would like to take my education to the next level.  Two years ago I would jokingly say that I felt like I was in elementary school when it came to my knowledge of real estate investing.  Last year I felt like I was in middle school.  Now I am ready to get into high school and beyond with my real estate education.  

    Speaking of a mastermind group, I have gotten to know some great people from BiggerPockets over the last few years, both inside and outside of my community, and it has been a growing experience getting to know them.  I think I will start looking to connect with a mastermind group to move on to the next level.

    Thanks for your post.

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    8y

    @Brian Bradley Great book suggestions.  I haven't read Tax Free Wealth, or Cold Hard Truth yet.  I will look them up on Audible.  

  • Deborah BurianPro Member
    Rental Property Investor · Oklahoma City, OK · Member since 2013 · 1k+ posts · 412 votes
    8y

    @Shiloh Lundahl - one more book to read if interested, The Millionaire Next Door  by David Bach

  • Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    8y
    Originally posted by @Shiloh Lundahl:

    @Mike Dymski You are absolutely correct.  I think what I am looking for right now is a mastermind group.  I would like to take my education to the next level.  Two years ago I would jokingly say that I felt like I was in elementary school when it came to my knowledge of real estate investing.  Last year I felt like I was in middle school.  Now I am ready to get into high school and beyond with my real estate education.  

    Speaking of a mastermind group, I have gotten to know some great people from BiggerPockets over the last few years, both inside and outside of my community, and it has been a growing experience getting to know them.  I think I will start looking to connect with a mastermind group to move on to the next level.

    Thanks for your post.

    Do it.  It's like having partners without the partnership.  I have two other people who know my finances and personal challenges very well and I know theirs.  We support and push one another.  They are successful and I was proactive about initiating our interaction at this level.  We get real.

  • Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
    8y

    The good thing about investing in real estate as another counter weight to just stocks and bonds is that you can adjust your holding as the market adjusts. You have more options and avenues. In down markets you get great deals, in up markets you hunt around more and shift what your looking for and hold and rent longer. Every investment segment will have bubbles, you just analyze your market and what rue value is and know before you make an offer if you are purchasing to flip, rent, short term, long term, refinance, etc. Have a plan before every deal, and have multiple exit strategies (refinance, renting, wholesale, etc). But DO NOT get stuck in the research paralysis mindset. Eventually you just need to jump and trust in what you have done and the team you built, and then make adjustments as you go. Your team should be able to educate you and help you along the way. 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.