Getting into REI with the odds in your favor?!

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

Thank You @Matthew Baltzell for your kind words. I do tend to be kind of hard on myself sometimes but I'm slowly working towards changing that.

I second that! I find that a lot of the times I need to create opportunities rather than wait for the universe to decide its my "lucky day".

Mahalo Nui,

Scotland Ray Smith

Ben Wilkins

Rental Property Investor · York, PA · Member since 2017 · 377 posts · 315 votes

8y

@Scotland Ray Smith - I couldn't agree (much) more with @Matthew Baltzell on the following two points: "You create your own luck", and "The key is to just get started"

I'm a mechanical engineer by degree, manufacturing engineer in a paint shop by profession. Basically, I program robots that apply pinstripes to gas tanks and fenders... this isn't really a big skill for investors. Yes, I'm more analytical than most which I agree can be a benefit.

How I got started? A fellow co-worker started talking with me about real estate investing. He's the inspiration, while I'm the analyst. We did our research on BP and other sources for two months, then decided to just make a go for it. We chose to break out of the analysis paralysis.

So we scraped together the cash needed for our first duplex, which happened to be a pretty good investment. Ten months later, we are closing on a quad that is even better than the duplex in terms of returns.

"Just getting started" was the first step, which is sort of a redundant sentence. We decided to do it, so we did it.

As to how we got the quad... I still can't honestly tell you how that happened, and I chalk it up to creating our own luck. Through some seemingly random conversations, we found out about an investor who wanted to sell for a really good deal.

My suggestions? Just get started - pull the trigger on a deal that makes sense. Learn whether or not you enjoy this sort of investing, and decide to continue or not. Second step: if you aren't already, start attending your local REIT meetings. Rubbing shoulders with other investors is a great way to learn, find deals, and find people who can help you find deals. Create your own luck by being proactive.

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

Aloha @Ben Wilkins Thanks for chiming in! I myself happen to be on the other side of the spectrum In which I operate what you engineer, not a bad day job but not necessarily my favorite place in the world.

I'm happy to hear you were able to team up and push through that first deal, ever more so that it proved to be a good investment! Best of luck on your quad deal, I'm positive it will snowball into much more profitable investments.

Yes, it may be redundant but I believe that that's one of the most important steps to take. I'm also starting to put myself out there and make more connections with other REI in my area. My work schedule is proving to be a bit of a hassle in that I can't make the REI meet up due to conflicting schedules. (Not to make excuses) or sound as if I'm doing so, just that I won't be able to attend the most recent ones.

Again mahalo for your kind words

Scotland Ray Smith

Grant Rothenburger

Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes

8y

I also believe that everyone has a skill set that can be used in REI to their advantage. But someone else already said that, so I'll add something else. Everything you mentioned can be learned! Those people didn't have those skills naturally, they learned them over time.

What is your background?

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

Aloha @Grant Rothenburger

I totally agree, I do remember a few of them saying that they learned by trial and error or learned the hard way.

Well primarily, I am fairly experienced in operating heavy equipment but found myself in the manufacturing business thereafter.

Grant Rothenburger

Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes

8y

Originally posted by @Scotland Ray Smith:

Aloha @Grant Rothenburger

I totally agree, I do remember a few of them saying that they learned by trial and error or learned the hard way.

Well primarily, I am fairly experienced in operating heavy equipment but found myself in the manufacturing business thereafter.

Manufacturing, so you're familiar with systems and the importance of having them for efficiency. That helps a ton in real estate.

Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

8y

@Scotland Ray Smith you are looking at cause and effect in reverse order!

You are looking at people's success stories and see that they had the exact talent available to make it happen. The truth is, they worked with what they had and built their strategy around their strenght - and their preferences. You look on it in hindsight and wonder how the skill matched up so perfectly with the challange.

It's no coincidence.

They have chosen their path based on their skills and strenght, not the other way around.

Just follow your gut and you will find that you will feel more attracted to some parts of REI than others. While some strategies seem daunting, impossible or unattractive, others will seem interesting, easier and more fun. Follow that path, it leads to success.

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

@Grant Rothenburger your right, I guess because learning the systems until mastered, ultimately to become more efficient became second nature (In the manufacturing business). I guess because my intent was to separate both worlds (manufacturing & REI) I never sat down and thought about how my job now could impact my REI future.

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

@Marcus Auerbach Thank you for your insight! I completely agree with you. Thinking back to some of the guests featured on the podcast, I do see that many of them did in fact have to work with what they had. I've actually figured out my strategy, I'm just working on planning and mapping everything out.

Grant Rothenburger

Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes

8y

Originally posted by @Scotland Ray Smith:

@Grant Rothenburger your right, I guess because learning the systems until mastered, ultimately to become more efficient became second nature (In the manufacturing business). I guess because my intent was to separate both worlds (manufacturing & REI) I never sat down and thought about how my job now could impact my REI future.

;)... Systems and processes are HUGE!

[email protected]Podcast Guest on Show #301

Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

8y

everyone has an unfair advantage. find yours!

you see people and they have some specific unfair advantage and you think "hey I don't have that, what gives?" but the reality is they said the same thing about some other advantage they didn't have. So they built their success around the advantage they DID have and now you're only seeing the end result. It's deceiving.

find your unfair advantage, build your success by leveraging it, and soon someone new will be on the forum looking at you saying "hey, I don't have that, what gives?"

you're not homeless, you're not disabled, your obviously not a moron, and you live in America....you have SIGNIFICANT advantages, don't take them for granted my friend.

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

8y

Great post. But I'd caution you to remember that a lot of successful people tend to put together a personal hagiography after the fact. When they tell their stories about coming up in a hard business, a very large percentage end up being mighty selective. It's just the wildest thing...I recently read Lance Armstrong's self-serving, thoroughly mendacious memoir "It's Not About The Bike." I don't think I'm giving away the ending when I tell you that he completely failed to mention the organized and determined use of PEDs anywhere in the book.

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

@Alexander Felice Thanks for your input. I set up a weekly schedule that involves lots of studying and what not and what I did noticed was that my routine incorporated too much subjects/objectives.. I'm trying to fine tune this routine and try to narrow down what I feel i want to excel at.. When I do so I think I'll find what works best for me.

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

@Jim K. Very true! When I hear some of the stories told by other REI (via- BP/Blogs/Forums) I feel like bits and pieces are missing if not chunks of information are left out.

Alexander FelicePro Member

Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes

8y

Originally posted by @Jim K.:

[email protected]Podcast Guest on Show #301

Great post. But I'd caution you to remember that a lot of successful people tend to put together a personal hagiography after the fact. When they tell their stories about coming up in a hard business, a very large percentage end up being mighty selective. It's just the wildest thing...I recently read Lance Armstrong's self-serving, thoroughly mendacious memoir "It's Not About The Bike." I don't think I'm giving away the ending when I tell you that he completely failed to mention the organized and determined use of PEDs anywhere in the book.

this type of subversive thinking is detrimental imo

Everyone who's successful did it with a secret advantage they hid from their story? Hardly.

Though success is relative, most people create it from the ground up. Most people do not get inheritance, start with money, or have successful parents. Most new millionaires are first generation. Lance armstrong used PEDS, so did every guy he competed against and half the guys in any recreation gym in America, myself included - yet I'm barely an average powerlifter? Why? because I don't do the work!

Thinking that people are keeping a secret to their success stories is a short leap to "the only reason people succeed is advantages I don't have" (this post) and it's just not that true. Sure you weren't born into money or prestigious family, so you can't be bill gates or mark Zuch, but you can get a LOT of success just by working hard. Thinking it can only be done with some advantage is disingenuous to yourself, it also completely ignores the MASS of books written every year that all say success is based on a few things: hard work, taking risk, proper mindset, and finding competitive advantages. To dismiss all this just seems like someone drinking some hateraid

;)

Terry Lao

Professional · Anaheim, CA · Member since 2017 · 1k+ posts · 686 votes

8y

There might be an edge to people in the industry like real estate agents, appraisers, mortgage banking, or accounting and finance . However, there is one specific that on 10% of the group does and others do not............that is take action. Brandon of Bigger Pockets constantly notes this, as 90% of people on Bigger Pockets will not take action. This is even after listening to podcast, asking questions on forums, joining RE groups/meetings, etc.

Here are 3 steps to give you an edge.

1. Get pre-qualified for a loan. Know your fico, ratios, and have your down payment ready. The loan is the most difficult aspect of the RE process.

2. Know your market (city). Read all available information on your target market, median SFR price, SFR sales, MLS listings, sold homes, local economy, jobs, construction, rankings on case shiller index, etc.

3. Practice running analysis on potential properties to the point where you can do them in your head. To the extent where you can look at a listing and pics for about 30 seconds and tell if worth further pursuing.

Create your own advantage.................. is when you are prepared and seeing an opportunity.

Terry

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

8y

@Alexander Felice

I think successful people do keep secrets to their success stories. Secrets that make them look bad. Secrets about quite a few reprehensible or unethical things they do to make money. All kinds of shameful, churlish personal secrets about what their outsized ambitions and immense personal ego has cost their families. I know we have plenty of that even in my own family.

I think it's a short leap from that to, "The only reason I don't succeed financially is that I'm not willing to compromise my ethics and personal morality to the point that other people do. I'm not willing to tell myself enough cheesy little lies to justify the nasty things I've done and the people I've knifed in the back to get to where I am today." I also think this is in many cases quite true.

You'll notice I have yet to mention a single concrete detail about how this belief affects or does not affect my own business. And you won't get one without a court order.

If I do make $40-$50 million doing what I do, rest assured I will have a training course and a shelf of books for sale and a traveling guru seminar and I will most certainly mightily and righteously insist in all of them that my success was all thanks to pulling myself up by my own bootstraps through taking the right risks, a good attitude, leveraging competitive advantages, AND OF COURSE HARD WORK.

Because hard work will set you free, or as it was once put in German, "Arbeit macht frei."

OP

Honolulu, HI · Member since 2018 · 22 posts · 7 votes

8y

@Terry Lao Thank you very much for taking the time out to share some great tips! I have to agree, getting started is half the battle! I'm pretty set on what it is I want to try use to my advantage, It's just a matter of being consistent so I can perfect it.