First deal- Dealing with unsupportive family?

Real Estate Deal Analysis & Advice

First deal- Dealing with unsupportive family?

Binghamton, NY · Member since 2017 · 9 posts · 8 votes

Hey guys,

I came here seeking some advice/support on this. I am a new investor who is closing on my very first property (a house hack) within a month. Now the place doesn't look amazing, it needs some cosmetic work, but it cash flows for days, it is structurally sound- no big ticket expenses, as well as it is located in a really desirable area for student housing. I was the happiest man around ...until my parents came up to see the place. No matter how hard i tried to assuage their feelings about this place they could not see behind the grime and the dirt. They hated it so much that my mom cried and basically made me feel like a turd for buying it. Now yes, this house was cheap and with my engineering salary I could buy something nicer, but they did not care at all about the cash flow. I haven't been able to sleep because there is no way i can back out of this deal without getting sued since we are so close to closing. I'm not sure I even want to back out, because I am confident in my estimates. I just feel extremely disheartened to have worked so hard to find this property and to be talked down to. Sorry, maybe i'm just ranting. Has anyone else had experiences with supportive family or friends?

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Flipper/Rehabber · Clarksville, MD · Member since 2014 · 85 posts · 66 votes

@Jose Duque - between us I'd ask yourself: How good are you parents financially? Are they savvy investors? Are they financially where you want to be at their age or not?

If the answer is "no" then you should love, respect, honor them for all the stuff they've done for you BUT understand that if they haven't succeeded in their own personal financial world then their advice needs to be taken with a grain of salt. If their criticism isn't based on logic, and your mom crying seems to suggest its more emotional, then you just have to understand that its probably not sound investment (or life) advice.

I think your parents will be ok but it may take some time. But the best thing you can do to make them feel better is make it a success and show them how much your banking doing it!

See this reply in the discussion

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Waverly Rennie
Rental Property Investor · Dunedin, FL · Member since 2015 · 121 posts · 61 votes
9y
@Jose Duque, I don't have much anything different to say except as @Brandon Brown said it boils down to people's attitude towards risk and reward. My family has been fairly nervous about my investing, which has been going very well, just as they were extremely nervous about my spending 30 years working in Africa, which worked out very well, too. You can't live your life by others' rules and expectations.
What's right for you isn't right for everyone and vice versa. If your numbers work, go for it. And if you made a bad deal, it's not the end of the world. You only have to be right 51% of the time.
One thing I really get out of BP is the sense of - oh, ok, others have made mistakes too, I should just expect it, and suck it up, rather than seeing it as a fatal mistake and throwing up my hands and going back to watching kitten videos (Brandon Turner always calls it "watching Dancing with the Stars" but I don't have a TV......)
best of luck!
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Mark H.
Investor · Grapevine, TX · Member since 2014 · 88 posts · 75 votes
9y
Had I followed advice from friends and family in the past, I would have found myself today financially as poor as they are now, with no option for early retirement. Nowadays they all wish they were in my shoes financially.
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Jose Duque
OP
Binghamton, NY · Member since 2017 · 9 posts · 8 votes
9y
It's been a tough week for me, but you guys have given me the energy and encouragement to continue walking down the path of REI. I love my parents no matter what, but like many of you said, it's my life and I have to live it without being scared to do things differently. Thanks everyone for all of your advice and support!
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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
@Jose Duque to be fair, none of us know you or your parents well enough to know if their concerns are legitimate. The truth is you could be making a huge mistake. In fact, your parents know you better than anyone who posted a response to you! If your parents lack confidence in your decision making ability, that is not a good sign.
It may be fine, but I am not going to be like everyone else and tell you that this is a great decision, because quite frankly there isn't enough information to confidently state that.
I would find a local investor with experience and ask them to walk through the house with you and review your numbers.
I am not saying you are making a mistake, just saying none of us have enough information to form a good opinion.
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Lawrence Amsterdam
Rental Property Investor · Atlanta, GA · Member since 2017 · 13 posts · 2 votes
9y
You have to stay the course man! Not everyone will understand what you're doing and how you're doing it, even your parents. As long as the numbers make sense and you're meeting the CF target you set out for in the beginning, keep pushing!
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Joshua S.
Rental Property Investor · Chesapeake, VA · Member since 2017 · 100 posts · 75 votes
9y
If you're confident in the numbers, it doesn't matter what anyone else thinks. Your parents probably just want you to do the norm. You know, settle down with a nice girl in a nice house. If they don't understand then they don't understand. If it's a mistake, it's yours to make, not theirs. If it's not, then they'll see your side once you're profitable. They're not the ones making the call, you are.
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Flipper · Pittsburgh, PA · Member since 2017 · 218 posts · 345 votes
9y
Jose, I am not in your shoes. A good friend of mine here in the USA is, however. His wife is from abroad and from a very traditional university-educated background with an extremely rigid European mindset -- she simply doesn't understand why he bought a cheap place to live in and fix up. In her view, he should have taken out an enormous mortgage on a palace and paid it off slowly over thirty years with the peanut salary that he would made working tirelessly as an office drone at some faceless company.

Now get this, my buddy has already paid his little house fully off, five years after buying it. With my help, he's getting a home equity line of credit on this place and is looking for a tax foreclosure to fix up and move his growing family into in one of the top three school districts in my county, because he knows the right opportunity will come along sooner or later, and he'll be ready to jump on it and get a small, fixable property at 30-40% of ARV. He's also completely changed careers: he went from a job as a nursing assistant into an HVAC apprentice position, a lateral move with no money increase at the moment but wonderful future prospects, especially as he intends to stay in the house fixing business and continue working with me. But his wife doesn't see, can't see it, refuses to see it. And as I'm sure you understand, his wife's family back in Europe isn't helping much.

What the wife doesn't understand is that residential housing is her husband's BUSINESS, not his EXPRESSION OF SOCIAL STATUS. This is a remarkably difficult point to get across. Your parents are the same way, and there's no way you're really going to change their perception. You can show them numbers a child should be able to understand all day long -- there's a huge, monstrous, built-up mental block in them to understanding your HOME AND HEARTH is not, by conscious choice, your personal EXPRESSION OF SOCIAL STATUS. It's an entrenched cultural neurosis.

The only solutions to this, I believe, for my friend's wife, for your parents, are absurd ones.

First of all, there are temporary fixes. Buy some nice clothes. Buy a nice watch. Waste a ridiculous amount of money on a late-model car instead of a sensible used one. All this will make your parents feel a bit better when they see you outside your home. I know it's stupid but it works.

But the real solution is the crass truth that QUANTITY HAS A QUALITY ALL ITS OWN. Once you are running two properties, three properties, four properties, the blinders come off, and there is enormous intellectual liberation watching it happen. "My son owns four houses" or "my son owns and rents out six apartments" is a very powerful, complaint-stopping statement in American society. You go from being a dumb house hacker to being a smart real estate investor. Once you get to "my son runs 40 units all over the Southern Tier," you will see a deep, powerful respect glowing in their eyes when they speak to you, their endlessly brilliant son, a man they tirelessly proclaim is the best thing they've ever done with their lives, and they will go on and on and on about how much they contributed to your success through the wise choices they made during your upbringing. A great son, doing great things in the world.

It'll be more than enough to turn you into a cynic.
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