The 6 Biggest Lessons I Learned From Investing in 2017

by | BiggerPockets.com

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.

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.  

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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.

Related: 3 Invaluable Lessons Learned From 30 Years of Investing

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.

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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.

Related: The Surprising Lesson a Six-Figure Salary in My 20s Taught Me About Wealth

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.

Summary

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?

Share below!

About Author

Sterling White

Sterling White started in the real estate industry at a early age back in 2009. The company he co-founded Holdfolio is a real estate crowdfunding platform based in the Indianapolis market. Before founding Holdfolio Sterling and partner Jacob Blackett were involved in the purchasing and selling of 100+ single family homes nationwide. In his free-time he trains for a World Record.

7 Comments

  1. Curt Smith

    Hi Sterling, Good to hear of your views of changes in 2017. I’d like you to blog about your MF deals in agregate vs cherry picking to show why you think MF has been better for you. My experience with commercial, a mobile home park, has been the opposite. More work for much less income. But I have a great SFR system. Go to my profile, the first paragraph has a link to a file I uploaded to BP files, How To Buy a Bullet Proof portfolio.

    I learned nearly the heard way that researves are king!!! We had a black swan event, our rent processor, erentpayments.com blow up and eat $10k of our rent. Over time we got most of it back (some not) like many others we had a mortgage payment squeeze. Many folks where hurt real bad by that blow up.

    I learned: Have at least $10k in side cash in an account you never touch (or more) for reserves.

    Also use stronger providors who can make things right when things go bad. Small players will just evaporate in a bad black swan event taking portions of your business with it. I bet lots of folks have had a contractor disappear with the front $$. Now you have to pay 2x AND find another contractor. Same goes for any of the tools and systems and banks we use.

    Not too long ago banks where evaporating being taken over by the FDIC and for a time your accounts are locked up…. What if? Is a great question to ask.

  2. Thomas Konditi

    Sterling,
    Great reflection from the last year! I too walked from a ‘beautiful property’ where the deal numbers were razor thin. Thankfully, my banker and a mentor gently convinced me that I was setting myself up, and I had the courage to pull the plug. Hard to do, but my best deal of 2017!
    Thanks…and best of luck in the new year.

  3. John Murray

    Best lesson I learned in 2017 was the new Tax Act. Perhaps it is the same old song, portfolio, passive and capital gains are the road to freedom and wealth. Earned income is the road to high taxes, insecurity and complaining about the system. Deprecation, pass through, portfolio income, passive income and capital gains is the true road of the American dream. The white picket fence and 2.3 kids per family is over, ain’t that America!

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