Warning: This is a full on rant. It’s meant to inform, but contains much ire. If this post stings a bit — tough. Get over it. Also, it’s not aimed in any way either directly or indirectly at any BiggerPockets contributors, as I wouldn’t write here myself if I thought the norm here reflected what I’m about to rip asunder. 🙂
So far this year it’s only gotten worse. The so-called advice to real estate investors of all stripes. Whether the target is buy and hold, buy and trade when prudent, flippers, or somewhere in the middle (whatever that might be) — advice written for real estate investors is never hard to find these days. Most of it though should be printed up and put through the shredder so the reader can save on this spring’s lawn fertilizer. They not only save some cash but end up with the greenest grass in their neighborhood.
I get this way every few years, usually when the advice gets so nauseous and ubiquitous that something inside compels a public response. The last time I did this was at a conference at which I’d been invited to speak. It was about three years ago, and I was asked an innocent question — based on the questioner’s bad experience in his local real estate market.
“What can you tell me to do differently, so next time I won’t end up with a lost cause?”
Problem was, that question came on the heels of our lunch break, during which I’d been asked the same question by the five others at the table. All of them had either found themselves locked into a ‘goin’ nowhere’ investment, or had lost their money completely. I’d spent the rest of the lunch break finding out what the common denominator was to all their stories. It wasn’t geography. It wasn’t property type. It wasn’t fraud of any kind. What was it?
Under my Columbo-like questioning, the pattern emerged. One after the other told me of reading one blog or another, sometimes, gulp, an eBook, all of which contained a soup to nuts ‘how to’ for real estate investment. You know — The Secret to Can’t Miss Real Estate Investing — I Share My Promised Land Secrets For Guaranteed Success.
They told me their stories, all of which contained the same chapter headings, more or less. The advice was laughable — criminal in my view. Yet they all followed it like it had been taken from the third tablet Moses must’ve dropped on his way back down the mountain.
Here are a few examples.
1. You must thoroughly investigate your target market. Get to know where the good deals might be hiding.
BawldGuy Here: Let’s frame this one. People actually pay for this crap? Investigate your target market? What does that even mean Forrest? It boggles the mind what folks will read and follow without knowing squat about what their task really entails, but what it really means OR the skills needed to complete it successfully. It’s like constantly having to walk up to the plate with the count already at no balls, two strikes.
2. Ensure you’re not overpaying for the property. This can be done by an in-depth analysis of the property’s immediate neighborhood.
BawldGuy Here: Yeah, and don’t swim in the ocean when ya see half a dozen Great White shark fins circlin’ your boat. Oh, can’t tell if sharks are there? Geez, what to do? Oh well, nothing risked, nothing gained. (Cello playin’ in the background.)
3. And my all-time favorite — Always invest in your local market, cuz you know that market best. Also, there’s no substitute for being able to drive by your property.
BawldGuy Here: It was at this point I asked each of my lunch mates if they were indeed enjoying the huge advantage of driving by the catalyst for their financial demise. “But what if an outa town builder rips me off?” What, all the local builders are Heaven sent? Should I infer from that question you’re a genius at home, but Forrest’s slow cousin in another state? Come on — do you realize how lame you’re sounding?
And that’s when the silence became like quicksand over hell.
Back to the questioner at the conference, and my answer, paraphrased from memory the best I can.
Please don’t take this personally, cuz I promise you it’s not meant that way. Let me begin by puttin’ this conversation into keenly focused context. If you studied for six months what I and my peers do for a living, would you know half of what we’ve forgotten? Don’t answer, it’s rhetorical. I challenge everyone here to go back to the source of most of their so-called knowledge, and reread what sent you scurrying off to the guaranteed success of PromisedLand.
Was there anything whatsoever of substance in their advice? Was there specificity in any concept they were ‘teaching’? Was there anywhere to be found an indication of real experience, specific knowledge and expertise?
Everyone, close your eyes. Remember the gold nuggets that excited you most in your search for real estate investment knowhow. If you’re honest with yourself, wasn’t most of it inane advice, feeding upon your thirst for success? How much if any was more valuable than, “Buy low, sell high”?
People, when it comes to investing in real estate, especially for the majority whose agenda is nothing less than their retirement for Heaven’s sake, stop treatin’ it like a D0-It-Yourself project for your kid’s 10th grade electronics project. The stakes are a lot higher than getting a bad grade in school.
Treat your retirement as if it was one of the most important times of your life, cuz it is. Just ask those who’re greeting you at Walmart these days. Think they read an eBook on real estate investing too? Wonder if their retirements were DIY? Ouch.
To those who insist on giving investment advice in terms of clichés and worthless bromides, I beg you to look in the mirror. Ask yourself how many good people have jumped into shark filled waters, or headed off to a non-existant PromisedLand due to your inane babble?
Shame on all of you.