Negative reactions from friends and family

74 Replies

My wife and I are just starting out and now have two rental properties. We are excited about these opportunities so we can’t help but tell those who are close to us. We were sitting down and sharing all of the not so positive reactions and we couldn’t help but laugh at all of the similar comments from different people in our lives. Fear and caution is by far the overwhelmingly common response. I’m sure all of you have had the same responses but I thought it’d be fun to share.

“Ok. Be careful. You remember Ron? He bought 30 properties in Texas. He over leveraged himself and lost a lot of money.”

“Maybe just buy one property and see how it goes first before you buy another one.”

“Wow that’s ballsy. Are you sure you want to take that risk?”

“Wow. I wish I could do that. I wouldn’t know where to start. I’m proud of you.”

“Since when did you become Richie Rich?” (It’s not my money it’s the banks money and I’m making money on the bank’s money.)

“You’re going to be a slumlord!!” (No I’m not. I hate that everyone says that.)

“Oh cool. I could totally live there when I can’t take care of my place any more.” (No mom you can’t. Sorry it’s business.)

Share you’re best responses. Especially the funny and ridiculous ones.

Gary Keller’s book The Millionaire Real Estate Investor says “Anyone can do it....Not everyone will......will you?”

What I heard/hear is: 

"Tenants are gonna trash your property."

"What if they don't pay you?"

"I could never be a landlord. I'd kill them."

"Have fun getting calls in the middle of the night when you're sleeping."

"What if they burn the place down?"

"You'll be fixing things all the time."/"You're going to get called all the time."

One guy said (and I still laugh) "It's way safer to put your money in a bank account and make interest off it."

I often take into consideration the source. If any of the friends/family are in a better financial position than what I am striving to get to, I MIGHT take their feedback into consideration.

@Michael Ryland most of my family (and friends) don’t know I’m involved in real estate at all. I like to keep it that way for pretty much what you’re describing.

What does telling them accomplish for me? It comes across as bragging, or you get the comments you’re experiencing or a bunch of negativity.

@Michael Ryland analyze the success of the source before wondering whether or not to take feedback seriously.

Lots of minimum-wage friends and family tend to have some unusually strong opinions. 😀

My responses from friends and family have almost universally been positive.  Generally along the lines of "oh, that's pretty cool."

The best comments have come from my Father in Law, who has about 30 single family rentals he's been building up (all cash--nothing every financed--how crazy is that?) for the last 15 years or so.

@Branden Hampton the negativity doesn’t dissuade me at all. I just brush it off. But it’s almost predictable what one might say.

@Caleb Heimsoth I agree with your point and after telling some close friends and family I told my wife .....okay let’s not talk about it anymore. And there are definitely those who we chose not to tell knowing what the reaction will be. It wasn’t meant to be boasting we were just excited about getting started.

Originally posted by @Karl B. :

What I heard/hear is: 

One guy said (and I still laugh) "It's way safer to put your money in a bank account and make interest off it."

 We really need to teach basic personal finance in high school. 

If the bank is paying me 0.5% for the money I've lent them in the form of "depositing it into a savings account," and inflation is 2%, then I'm paying the bank about 1.5% for the privilege of them borrowing money from me. And then if I'm a typical consumer, what do I do? Well, I don't want to "touch my savings," so I buy the shiny crap that I want on credit cards. 

So, to recap.

  • I lend bank money at 0.5%, but inflation adjusted it's -1.5%.
  • Then the bank turns around, takes that exact money I just lent them, and has the audacity to lend it back to me in the form of credit card debt at 13%.
  • So really I'm giving the bank 14.5%... 
  • And I as a normal consumer do this voluntarily, I literally go there and wait in a line to sign up for this.

I'm not a HML but a lot of folks balk at their 10% interest rate... at least they are honest and direct about it and don't dress it up.

FYI this is why there was that Wells Fargo "each customer should have eight accounts!" scandal not too long ago. That spread between just two accounts of 14.5% is where the money is at if you're a banker. Would anyone here like to tell me the combined spread if you have EIGHT accounts with money moving back and forth between them? 

"Talk about things that matter to people who care." -Darren Hardy

Meet others with empathy.

Can we make this thread for “Negative reactions by BP members when you tell them you’re investing in Detroit”?

😭

Originally posted by @Chris Mason :
Originally posted by @Karl B.:

What I heard/hear is: 

One guy said (and I still laugh) "It's way safer to put your money in a bank account and make interest off it."

 We really need to teach basic personal finance in high school. 

If the bank is paying me 0.5% for the money I've lent them in the form of "depositing it into a savings account," and inflation is 2%, then I'm paying the bank about 1.5% for the privilege of them borrowing money from me. And then if I'm a typical consumer, what do I do? Well, I don't want to "touch my savings," so I buy the shiny crap that I want on credit cards. 

So, to recap.

  • I lend bank money at 0.5%, but inflation adjusted it's -1.5%.
  • Then the bank turns around, takes that exact money I just lent them, and has the audacity to lend it back to me in the form of credit card debt at 13%.
  • So really I'm giving the bank 14.5%... 
  • And I as a normal consumer do this voluntarily, I literally go there and wait in a line to sign up for this.

I'm not a HML but a lot of folks balk at their 10% interest rate... at least they are honest and direct about it and don't dress it up.

Agreed. The closest thing to finances I learned during high school was learning how to balance a checkbook in home economics class. 

My friend's brother said it (the interest rate quote). The guy hasn't had a job for two years (not kidding) and my favorite quote of his (from roughly 10 years ago when he was in his mid-20s and living with his brother) was the following, "I'm tired of being poor!" 

You're really better off not sharing about real estate investing with those that are close to you. A lot of people without any knowledge or insight will say all kinds of things out of fear or from things they "heard" and it can influence your decisions and judgement. Not that some may be right and have valid points and opinions but I believe it's best to share with people outside of your circle and get advice from those who are actively in this business. This way emotions stay out of it.

@Michael Ryland 17 months ago I heard all the same stuff. Now have 7 SFR and ready to close on a 4 plex puts me at 11 doors in just over a year.now they think I'm some big time guy. I think I'm just small compared to many on BP. But I enjoy what I do and now I live off my properties along with help from a VA payment I get. Life is good and I dont really care what friends and family have to say. Have fun set your goals and stay humble. Life is good.

@Roger Hefner

That’s awesome, Roger. Where are you investing? Self-managing or property management?

Originally posted by @Tom Aiello :

My responses from friends and family have almost universally been positive.  Generally along the lines of "oh, that's pretty cool."

The best comments have come from my Father in Law, who has about 30 single family rentals he's been building up (all cash--nothing every financed--how crazy is that?) for the last 15 years or so.

 your father in law is not crazy he is the smartest one out there.. anyone can create a house of cards with max debt and take on max liabilities and risk.. few can do what he does.. listen to him.. that's the bottom line.

Originally posted by @Travis Biziorek :

Can we make this thread for “Negative reactions by BP members when you tell them you’re investing in Detroit”?

😭

guilty as charged but last time I was there .. changes in the outlying areas was good and evident there are still place to avoid in Detroit no question.. just like all big rust belt cities. 

I suggest people keep the investment confidential. Most people will not even talk to their relatives or friends about it unless being asked. @Caleb Heimsoth   is correct.  

Those who invested in rentals after a fire (CA) often are stressed out getting sued and have to sue someone. People lost their life savings in out of the state properties who rely on others who fled after collecting the rent. 

It will get even ugly when those who counted on rental income to pay their mortgage in the next recession. Landlord chose to kill his (employer) executives because of his job loss and his tenant missing rent payments. "I get life behind bars because I had 4 mortgages I can not afford to pay". 

Originally posted by @Jay Hinrichs :
 your father in law is not crazy he is the smartest one out there.. anyone can create a house of cards with max debt and take on max liabilities and risk.. few can do what he does.. listen to him.. that's the bottom line.

 I was more thinking it was a crazy achievement.

My wife has drawn a lot of her thinking from him, so we tend to pay off our properties very quickly (under 3 years in every case so far) but we've never bought a property entirely in cash the way he has.  And we tend to leverage our existing properties for down payments on the new ones, which he has never done.

"Can you rent to my brother/cousin/friend who just got out of jail/fired/evicted?"

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allways have the biggest benz...when i change or dissapear..they said really..!!..you!!..yourreee an inmigrant....no way!!!

I get positive reactions for properties that I build (new or renovate).  I find negative to no interest from rental properties.  Most people think being a landlord is a headache.

I tend to be negative towards those who invest in turn-key properties, as most of the deals will turn out sour for investors.

@Michael Ryland this reminds me of “The Subtle Art of Not Giving a F*ck.” By Mark Manson.

Some stuff isn’t worth caring about. I totally agree though. I have a CPA father who is like house is just that, the house, not an investment! Lol

"Be careful. Your friend Jason had a rental property for a while, and it was a disaster."

"Oh really? What happened?"

"The water heater went out... it was terrible. They had to replace the water heater."

"..."

Updated 3 months ago

What I should have replied was: "You keep on using that word. I do not think it means what you think it means."

Updated 3 months ago

What I should have replied was: "You keep on using that word. I do not think it means what you think it means."

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