The Secret to Real Estate Investing Success

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I have two offices.  One is located in a modest single-level building in downtown Gilbert, Arizona.  The other has four wheels and smells like breathe mints (my daughter loves those things).  Whether I’m at my desk or behind the wheel of my car you can bet I’m listening to local sports radio.

This week, in between talk of the future of the Arizona Cardinals and the lousy Phoenix Suns basketball team, I was clobbered over and over by an obnoxious commercial.

Yet another real estate investing guru is in town promoting their foreclosure boot camp.  The ad is dripping with promises of investment secrets revealed, no money or credit required, flipping deals in 30 days or less, and huge profits with little effort required.  Oh, and did I leave out that seating for this can’t miss event is limited?  Yuck.

I’ve been in the business for 10 years and have experienced massive success, and colossal failure.  Do you want to know what the secret to real estate investing success is?  THERE ARE NO SECRETS.  No magic dust.  No path of least resistance.  No short cuts.  However, there are a lot of painful truths, like:

  • It takes money to buy real estate (maybe not your money, but somebody involved in the deal will need the cash to close and for you to get paid).
  • It takes time to buy real estate (good deals aren’t growing on trees).
  • Most contractors over promise and under deliver.
  • You will not get rich quick.
  • You will have to work hard (nights and weekends included).
  • Someone will screw you over.
  • Someone may sue you, or threaten to sue you.
  • At some point you will lose money.
  • The real estate investment guru is selling his program because he’s broke and needs to raise money to start doing his own deals.
  • Buyers are liars.
  • Sellers are worse.

Real estate investing is a business.  Most businesses take at 3-5 years to become successful.  So it’s absurd to think that a one-day real estate investment training course will result in unthinkable profits.  If it were that easy everyone would be a real estate investor.

Like my business partner says, this isn’t McDonald’s.  There is no secret sauce.

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.

40 Comments

  1. This is, by far, THE BEST, most honest and direct article I have read in ions! FINALLY, someone has the cajones to call it like they see it, and I couldn’t agree more.

    Thank you for this breath of fresh air.

  2. Carole Murphy on

    How true! I am always temped to read these “get rich quick schemes” and then I sit back and start questioning myself whether this is a “scam”.

    Thanks for being so direct and honest.

  3. Come on Marty? This isn’t a get rich quick business?! I’m handing my real estate books back in then. Good article, alot of folks that watch the late night REI sales pitches think its going to be a walk in the park and easy to do with no money down. Now it is possible, but 9 out of 10 will not be able to pull it off, its just not meant for everyone. Even with a couple dollars to go at this, I still question my capabilities in this. I have been institutionalized(Corporate World) for a long time and taking these types of chances are not easy feeling yet. Your truths can turn a stomach just reading them. Only time will tell. #2 flip almost ready! Hope to have #3 under contract soon. Have a great day!

  4. I got sick of all those bold promises that most so-called gurus try to give to beginner real estate investors. While some people are educated enough to tell that these guys are scams, there are many others that still believe in fairy tales and magic pills. From my own experience, working hard and being consistent for a long time is our only way to succeeding in this business or any other business. Thanks for the advice Marty

    M Mark

  5. So true Marty. Thanks for posting this article. I have done wholesaling, rehabbing and buy and hold over the past several years and I can tell you that each one has offered up some eye opening experiences. I too have made some good money and also lost some money in this business.
    The so called “guru’s” is the reason I quit my local REIA years ago. Every teacher, cop, firefighter and down on their luck person was at our meeting selling a dream. An unrealistic one at that.

    • Sharon, I spun my wheels the first 2 years in this business because I believed motivated sellers would call me. Finally, a good friend told me I had to go find them. I started knocking on 40-60 doors a weekend and my business blew up. Hard work is they key. Thanks for reading.

  6. Marty,

    Thanks for this refreshing post. I work with a group of folks who learned a lot of hard lessons about real estate investing. One of their favorite mantras is “ask us how we know.” Whether it is about deals too good to be true, or investing in rough neighborhoods, or the first or (second) time someone tried to rip them off in the process. Of course, after the magic of 10,000 hours, the process becomes more and more perfected. The wise clients gain from this experience; the do-it-yourselfers (though sometimes lucky), often go off and make the same expensive mistakes.

    Keep up the good work.

    Christi

  7. Hey Marty, do you have any articles on your door knocking days? I’m 23 and just saving for my first investment property in Texas and I want a good no nonsense place to start.

    • Matt, my sister-in-law read this post and told me I left a very important painful truth – WITHOUT A SUPPORTIVE SPOUSE OR PARTNER YOU’LL STRUGGLE TO SUCCEED. This is so true. My wife is my biggest supporter and I’m blessed to have her. Thanks for reading.

  8. Good article Marty. I concur, it does take alot of door knocking and foot work to “Make it happen!” Like Richard Branson said it best “Screw it, just do it!”

    • Robert, I got rich quick in real estate from 2004-2006. My net worth in January 06′ was about $8 million. I owned 65 houses. Unfortunately, the same market forces that made me rich broke me even faster. By 2008, I had a negative equity position in my portfolio of $2 million. I guess it’s true what they say, pigs get fed, hogs get slaughtered.

      • Marty, you’re honesty and humility is a rare find. Reminds me of my a man I admire deeply- Mr. Warren Buffett. I will continue looking forward to reading your honest and straight forward comments.

  9. This is what I like to hear! Something that at the very least sounds like reality. I gave up on the guru’s years ago after buying Carlton Sheets program. Ultimately I realized that whatever you want to know or need to know is out there all you need do is ask. So I started talking to people who were out in the real world doing what I wanted to do, and I was pleasantly surprised to find that they are happy to help and will tell you anything and everything you need to know, and guess what, They do it “FOR FREE”!
    Loved your article I’ve printed it out and put it up on the wall by my desk where I can see it while I work.

    Thanks Marty

    • Ed, you discovered the same thing I did. If you’re willing to serve a successful real estate investor in some way (help them comp houses, find them deals and/or money, help them fix up their houses or manage their rehabs) then they’ll share what they know with you, for free. It’s a win-win.

  10. I couldn’t agree more! Most small or new investors here in the Pacific Northwest use – or at least start out – using a buy,hold and manage, then sell many years later strategy. Although they may earn a good ROI at the time they sell, the profit margin for most during the hold and manage period is thin at best.
    If I were to give advice in a single phrase, I would say “You reap what you sow.” An article entitled “What Does It Take To Make A Real Estate Investment Profitable” published in the August Edition of Update – the Rental Housing Association of Puget Sound’s newspaper might be helpful to struggling or new real estate investors.
    -Kathy

  11. Taj Washington on

    This is all great information from everyone. I’ve bought carlton sheets No Down Payment program and Russ Dalbey’s Winning in the Cashflow Business Program. I’m very motivated to start a investing career as a real estate investor as well as a note investor. can anybody advise me where to start?

  12. Pingback: An Insider’s View from the Courthouse Steps: BiggerPockets’ Investor’s Corner | REALTOR.com® Blogs

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