Reaching the Eye of the Storm of Real Estate Investing

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A hurricane generates the same power in one day that the entire world generates in 200 days.

Living in Texas, I am well acquainted with hurricanes and the power they contain. The outer bands of a hurricane are where the wind begins to pick up and as it gets closer it becomes increasingly more fierce, until reaching the eye of the storm.  We can liken real estate investing to such a natural phenomena.

As a budding new investor or someone on the outside looking for their entrance into the world of Real Estate Investing, the strong winds of information can be confusing and intimidating.

I recently watched a LinkedIn conversation within an REI group where a person inquired about starting out in real estate investing.  She was very quickly barraged with replies ranging from “you can make $400k your first year” to “times are tough, be careful”.  This lady must have wished she had never asked!

While recently speaking with a new investor about some marketing ideas to motivated sellers, the feelings I experienced in the beginning of my real estate career came rushing back into my mind and body like childhood nostalgia.  I quickly recalled how confused and overwhelmed I was in the first couple of years while I drown in the sea of decisions concerning my real estate business.  Compassion filled my heart for this budding investor as he struggles to make those same decisions that will bring success to his business.  I believe every investor has experienced these feelings at one time.

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Ever Been in a Hurricane?

The Wind

A hurricane always brings lots of both rain and wind.  The wind can be likened to the fierce swirling of information, ideas, philosophies, tips, tricks, etc. that is more than ever available to someone with access to the internet (which is pretty much everyone).   High winds are very loud in your ears and cause you to lose your orientation and focus.  Too much information is just that, TOO MUCH!  Stay focused on an aspect of real estate investing and take action.  The swirling of ideas & tricks & programs will lull you into a state of confusion and NON-ACTION!  Don’t let the gale force winds take you out!

The Rain

The rain can be likened to the pitfalls and setbacks from mistakes or just plain misfortune that every investor encounters.  Flash flooding occurs and you can’t get through that low water crossing.  You seem to be stuck.  There is something that is blocking your way to achieving your goals.  Every investor has been in this place of waiting and analyzing and regrouping, looking for a better route.  Don’t be discouraged!  You can’t control the rain, so wait patiently for the opportunities that will come your way.

With a hurricane, it is wise to flee from where the greatest destruction is going to occur, finding shelter and safety.  With real estate investing, the key is to weather the storm until you reach the eye.  This place is where the experienced investor dwells.  Although always continuing to learn, there is a place of stillness that the seasoned investor enjoys and is able to see clearly how to be profitable in his/her niche.  This is a place of confidence and surety for the investor.  In this place, goals are achieved and dreams are realized.

Remember experienced investor, if you decide to go after a new niche in REI, you will leave the calm of the eye and re-renter the rough elements once again.  Somehow I think many of you are thrill seekers anyway 😉

Be encouraged new investor, as you hold your ground through the wind and the rain.  If you do not faint, you will enter that coveted eye of the storm.  I believe that these are the 3 traits of an investor that allow them to reach this place:

FOCUS ON THESE 3 THINGS

  1. Being persistent, patient, and not fainting (that is one characteristic, not three)
  2. Learning to be resourceful in all areas of their business
  3. Learning from their own and other people’s mistakes

To encourage a new investor, can any of you experienced investors share a time where you had to weather the storm?

Photo: NASA Goddard Space Flight Center

About Author

Jason Grote

Jason Grote, co-founder of of IBuyAustinHouses.com, has been involved in real estate investing for 10 years. Through his experience, Jason has gained the expertise to sell a home fast and can also help people wanting to begin investing in Austin, Texas real estate.

6 Comments

  1. Melodee Lucido on

    Jason, You are an absolute angel to many people in this moment. So many experienced investors walk around (post around) all puffed up like they are the bomb. They all but laugh at the dummie noobs asking ridiculous questions.

    Yes, sometimes we do forget how it was when we were starting out. I have always been a self starter so I know it all works out. I find it easier . . . and more challenging as I get to my later years. I am working toward the goal of needing to do very little work. I can seeeee the eye of the storm : >

    This is a great analogy you have written. I am sure it will encourage many here. You are very compassionate Jason. On behalf of alllll the newbies lurking here and wondering there, thank you for the generosity you have offered. To the many that are trying to figure it all out you have made a human gesture of kindness.

    Huge success to you Jason!

    • Jason Grote

      Thank you Melodee for those kind words… Investors need to encourage one another. There are endless investment opportunities out there to be had. People just need to believe they can do it! Success to you!

  2. I’m still learning about this fun and crazy business, but one thing we missed in our first investment was including a monthly repair percentage in our monthly expenses. I went back and reviewed some of the great books we had learned from (such as Keller’s The Millionaire Real Estate Investor). I couldn’t find this. It appeared the examples were considering newly rehabbed rental properties and therefore didn’t need repair. However, we moved in to a rehabbed duplex which was originally built in the 20s. We had some high expense plumbing repairs surprise us and supposedly the plumbing had been redone. But even new work is only as good as the quality of the work that is done. Additionally, houses and things wear out. Tenants put wear and tear on houses. So, we’ve added a 10% repair expense to our monthly numbers, bringing the total monthly expense to 50% of gross rents. While some people consider this excessive, if you really break down the numbers, my mentors say this will be true over time (taking into consideration utilities, vacancy, management, profit, and properly taxes, along with a small buffer for surprises). This number might be slightly less with HOA condos as some large repairs (like roofs) are often covered in monthly HOA figures.

  3. chukwudi motanya on

    Inspiring article. I actually just graduated from college and I plan to get into residential real estate rentals. Anyone I could chat with for a brief moment that has been in this area?

    Thanks!

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