2017 was a fantastic year for investing in real estate—and for me. As I performed my personal review and looked back over the last 12 months, here are some of the key things that stood out.
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The 6 Biggest Lessons I Learned From Investing in 2017
1. There is always room to grow.
My business, myself, investments, and the residential housing market have done very well over the past few years. Still, there is always room to grow as an individual. It’s important to always keep expanding. That may be outwards to new markets, using new strategies and deal structures or new types of assets and properties. If I don’t grow, then I miss achieving my big goals I set out to accomplish.
2. Multifamily is so much better.
One of the big realizations I’ve had over the past year—with my first multifamily purchase, among others—is how much more efficient it is to acquire and own multifamily property compared to single family homes. I’ll still hold and invest in single family, but I have started doing more apartment building deals and am seeing great results from it.
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3. The real estate market has changed dramatically.
The real estate market has taken a huge shift, even compared to a year ago. A broad and deep variety of factors are involved, and trajectories could change. Still, as much as some don’t want to acknowledge it, the market is changing. The retail sector is experiencing the rapid changes with the way consumer behavior is shifting towards the online platform. That does bring opportunity; investors just have to acknowledge the real opportunities may be different than in the past couple of years.
3. It’s vital to leave room in your numbers for changes.
You simply can’t buy deals with the thinnest acceptable margins and hope things will work out. That’s the path to negative cash flow, negative equity, and disaster. Whether you end up having to bring in professional property management, fixing unexpected repairs, or paying a big new tax bill, you want to have an extra cushion in your numbers. The deal I walked away from last year could have easily put me in a tough position from a cash flow standpoint if the deal went through. That was the best deal in 2017.
4. A willingness to be flexible is valuable.
When rules, markets, and opportunities shift and change, it is vital to be make the necessary pivots. Only those who are will survive and thrive. It is even better when you get ahead of the curve and embrace or pioneer change yourself and with other like-minded entrepreneurs.
5. It’s a privilege to have a great network.
Over the last year, I have definitely benefited from being able to engage with experienced investors on BiggerPockets. I am also incredibly grateful for those who have read and shared my writings. It’s an honor to have this platform to help and bring value others.
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6. A great team shouldn’t be underestimated.
No matter how much you learn, experience you gain, or skills and natural talent you’ve got, a great team is essential. Having good partners and team members—and knowing how to work with them—makes all the difference in your success and ability to help others.
Taking time to reflect on the past year during this season can have a lot of value. This exercise will help you think about what you’ve learned and better plan for the year and years ahead. Keeping a journal of this over the years may be even more beneficial.
You don’t necessarily only have to do this at the end of the year or even in January. It can be done quarterly, weekly, or even daily. Any time you can evaluate yourself and make adjustments to improve it only helps with growth.
When and how do you do your reviews and planning? What did you learn over the past year? What difference will it make in your plans for next year and beyond? What are your plans for 2018?