Which of These Is the WORST Real Estate Advice Gurus Give Beginners? (Pick One)
I've been in this space for many many years. The amount of bad advice being sold to new investors hasn't gotten better, it's gotten worse. Five myths. Which one do you think is the worst advice?
A. "You Can Get Into Real Estate With No Money"
No money down doesn't mean no money. You still need reserves, credibility, and a network. The people pulling off creative deals have years of relationships behind them. Beginners just get taken advantage of. I see people in a specific facebook group literally noting they are being evicted next week so can someone send them a no money required deal...
B. "Wholesaling Is the Perfect Beginner Strategy"
Find a deal, assign the contract, collect a check. Except in any competitive market, finding that spread requires deep market knowledge, real marketing spend, legal compliance, and a cash buyer list you haven't built yet. Most beginners spend 6-12 months and close nothing as they all buy their lists off the same skiptracing sites.
C. "Rentals Are Passive Income"
One self-managed rental is not passive. It's a part-time job with liability attached. True passive income from real estate takes years of infrastructure to build. Oh and you will be able to retire in ten years from FIRE for having a few rentals. How many people you know have truly retired early? Difference between doing waht you love and retiring.
D. "Find a Great Deal and the Money Will Follow"
Capital doesn't chase deals. It chases people it trusts. Build your investor relationships before you're under contract with a 30-day close. People invest today in both people and the deal.
E. "Fix and Flip Is Fast Money"
Hey I watch HGTV, they can do it so can I. I do not know the difference between a furnace and a heat pump but hey, I can do this. Then realize Contractor ghosted. Permit backlog. Market softened. What looked like a fat margin on paper just got wiped out by seven months of carrying costs and they are still fixing drywall repairs.
Lets take a poll. Feel free to add as well
- Chris Seveney
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#2 Buying & Selling Real Estate Contributor
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The quality of advice in the real estate forums has declined significantly over the past few years. I would argue that someone with little to no real estate experience is often worse off relying on general forum consensus.
Some of my favorites are the Morby minions who don't care if they are underwater after a subject-to transaction as long as the property cash flows. Although don't see many of them posting anymore....I wonder why.
The asset protection advice is often terrible. A few firms in particular who target real estate investors lean heavily into fear-driven marketing and sell structures that are not even relevant to owning and operating real estate. The unfortunate part is that many clients never stop to ask how or why those structures are supposedly effective.
The idea that cheaper real estate is inherently less risky is misguided as well. In many cases, the opposite is true. Lower-priced properties are frequently located in weaker markets, require more intensive management, experience higher delinquency and turnover, and can leave an owner underwater very quickly if rents soften or unexpected capital expenses arise. The low purchase price often lures inexperienced investors into deploying capital in the middle of nowhere USA. I don't see this changing anytime soon.