Real Estate Investor · Glenview, IL · Member since 2010 · 36 posts · 1 vote
Hi all, I am on my way to save $100,000 in 5 years and wanted to know about what the mentality of a successful real estate investor should be. My dream would be to form a partnership each contributing $100,000 for a million+ real estate investment deal. My one concern is that the stress of managing the tenants or worrying about burning out and losing intereste/desire.
How should you, the successful real estate investor think? I have done my first real estate deal and was a little burned out by all the stress (by managing the house and such), and things went a little sour. I didn't lose any money, only the opportunity cost of using that money for great returns.
Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
14y
When you add partners - you lose control. It would be like throwing your money away in the stock market. Leverage & control are some key issues to think about when getting into RE investing.
Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
14y
When you add partners - you lose control. It would be like throwing your money away in the stock market. Leverage & control are some key issues to think about when getting into RE investing.
Investor · San Ramon, CA · Member since 2011 · 1k+ posts · 569 votes
14y
I'm with Dale.
Real Estate Investors tend to be more pro-active... wanting more direct control of their investments and expecting to reap a greater reward due to their efforts. Real estate investing is far more hands on than your 401k or mutual funds, but the added control and direct influence of the returns seems to be something more real estate investors want.
You sound like you want to passively invest in real estate. There are ways to do that (giving money to a Hard money broker, real estate backed equities, etc)... but getting 9 partners and buying a million dollar investment is definitely not one of them.
Partners, especially a LOT of partners, greatly complicate the process, they definitely don't make it easier.
Real Estate Investor · Glenview, IL · Member since 2010 · 36 posts · 1 vote
14y
I think you are right when you say I want a passive role in real estate. But then again, I simply don't know, maybe I will come to enjoy owning an apartment that has double in value in 12 years.
Hardmoney lending is sort of like being a limited partner in a real estate partnership with a little more skin in the game. I wouldn't count out partnership as long as I team up with a 20 year vetern general partner that I trust, and I can be a limited partner with cash flow benefits and an equity stake in the building.
Right now, I am focusing on my career in finance. That's why passive investing appeals to me
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
14y
I think in general there is a more gradual progression in terms of climbing the ladder. Most of us start small and work our way up. At the lower end the mistakes are not nearly as costly and the knowledge gleaned from those mistakes is very valuable later on. What you are talking about doing is akin to going from a moderately successful single family investment straight to a 30-50 unit building. It's obviously not the same thing. Rather than save up 100k in the bank if you are looking at a five year plan, why not invest that money gradually with an exit to get out in a couple of years to get into a bigger deal? You will have gained much more knowledge and if you've invested wisely you will have more to invest with as well.
Investor · San Ramon, CA · Member since 2011 · 1k+ posts · 569 votes
14y
Originally posted by Sam Lee:
I think you are right when you say I want a passive role in real estate. But then again, I simply don't know, maybe I will come to enjoy owning an apartment that has double in value in 12 years.
Hardmoney lending is sort of like being a limited partner in a real estate partnership with a little more skin in the game. I wouldn't count out partnership as long as I team up with a 20 year vetern general partner that I trust, and I can be a limited partner with cash flow benefits and an equity stake in the building.
Right now, I am focusing on my career in finance. That's why passive investing appeals to me
Essentially, you're asking for your cake and you want to eat it too... those two things don't generally go together. If you want the equity stake, you need to be more proactive and hands on... if you want to be passive, expect a more fixed return with very limited upside potential. To get the rewards you want, you either need to be very risky or add some of your own effort... you won't get it in a passive sense.
Real Estate Investor · Glenview, IL · Member since 2010 · 36 posts · 1 vote
14y
Yeah, i'll think about it. I haven't really considered doin that. I only have $40k, can I do anything substantial with that? I genuinley have not educated myself in real estate investments with such small downpayments.
Currently, that money is in stocks (apple). I have been quite fortunate to have that sum double twice within a span of four years, so stocks have worked out for me thus far. It is more of a factor of getting lucky with the market timings now that I think about it :D
Yea, I will look into investing in like a duplex with a $40k warchest
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Originally posted by Sam Lee:
How should you, the successful real estate investor think? :D
Hi Sam, I think we touched on this before.....think like any other successful person in business!
Please define success. Does making that million make you successful? Doing that in 12 years? How about 6 years or in one deal?
The successful people I know and I include myself look at success as a mixture of several aspects of life, not just the ability to make money.
I think I could have sold tires and been successful, maybe not as successful as in RE, but RE was not the key to success, simply a means to make money, for me it was (is) easy money, but I enjoyed my business, my contributions and assisting others who wanted to achieve something. You need to enjoy what you do to be successful or happy IMO.
Birds of a feather flock together. You are who you associate with. Reject the greedy, the unethical, the self-centered and the selfish and especially those who lie and cheat.
Believe me, having money does not mean happiness or success, it's only a means to pull up along side of it, to cross over to it takes many other life experiences!
Real estate is only a means to an end, it's not life, do the best you can at what ever you do and you will be successful, the money will come if you play your cards right. Good luck!