4 Entertaining Movies That Teach Us About Real Estate Investing

by | BiggerPockets.com

Is Hollywood a true mirror of our lives? Clearly not, but extreme depictions of daily events and truths can teach us a thing or two if we are willing to look. There are numerous real estate or finance-related movies that make clear certain mistakes that should be avoided, even if the results are not so drastic as plotting the murder of your neighbor or having a ceiling fall on your head.

Let’s take a peek and see what lessons we can learn from these often-hilarious examples.

1. The Money Pit (1986)

The Money Pit, its title largely self-explanatory, plays out much like an old Cary Grant movie from the 1940s, providing some timeless lessons. While simple in its concept, this film provides one of the most important elements of choosing a good investment property.

When Walter and Anna (Tom Hanks and Shelley Long) start looking for a new house on a very limited budget, they are talked into a house that looks awesome with a price too good to be true. And it turns out that “too good to be true” was exactly right! Enter: some solid due diligence.

Make sure your contract leaves you the time to thoroughly inspect the home—and make sure the inspector is not your brother’s co-worker’s best buddy, but a licensed professional who will know what to look for and recommend further inspection where needed. Walking blindly into an investment can go horribly wrong. Taking the time to check out any factors affecting the property’s physical condition will pay you back in the end, but do not forget other potential areas of impact—verify your zoning use, CCRs, title history, potential liens, etc.

2. 99 Homes (2014)

Let’s talk bad investments.

What happens to Andrew Garfield as Dennis Nash, in the 2015 Golden Globe Nominee 99 Homes, who after a rough go financially is facing foreclosure on his home? Sentimentality clearly gets the best of him, and he strikes a “deal with the devil” to bail himself out and save his home.

Related: The Must-See Financial Movie of the Year (& What We Can Learn From It)

While hilarious in its exaggeration, this film does help us see that sentimentality and pride can firmly stand in the way of wise investment. Recovering from a bad investment or one that you become “attached to” requires the ability to step outside yourself to avoid cost bias and get yourself out of it.

Taking a loss and moving on is the way to learn from your experience and move on to more lucrative projects without losing your soul in the process.

3. The Big Short (2015)

The Big Short takes place in the lead-up to the 2008 U.S. mortgage crisis and provides the background story of risky investment practices. Christian Bale and Ryan Gosling star in this dramatized rendition telling the tale of investors trying to “play” the economic forecast to an extreme level. Reading the market, evaluating the forecasts, and trying to predict social and financial trends resulting from the current economic state is a skill that requires knowledge, experience, and insight.

Don’t simply take the word of any economist. The ability to see through the blind spots in the market comes from years of experience and a specialized focus in real estate investment. Seek out the advisors who can take this data and translate it to real time success for you in your endeavors.

4. Inside Job (2010)

Many of us are still dealing with the ramifications of the 2008 global financial crisis even 10 years later. Trillions of dollars and millions of jobs were lost since the Great Depression nearly led to a global collapse. Inside Job reveals to us the importance of using savvy and cautious practices to guide our financing strategies when purchasing real estate.

Related: 5 Business Books That Changed My Real Estate Investing Life

After 2008, stricter rules were put in place with regard to banking and financial industry guidelines. Still, it’s vital for investors to avoid overextending themselves, putting personal assets and potentially others at risk. The goal should always be to balance your portfolio for maximum income while still managing risk.

Beware again the “too good to be true” deal, and make sure you have solid financial professionals on your team to give you the best and wisest advice.

Thanks, Hollywood, for the exaggerated but often hilarious peek into the investment world. As wise investors, we can always benefit from another learning experience and a reminder to plant seeds where they will thrive.

What films would you add to this list?

Comment below!

About Author

Andrew Propst

Andrew Propst has over 18 years of experience both in residential and commercial real estate management. Currently Andy is the CEO of HomeRiver Group (the parent company of HomeRiver Boise) and a Business Developer for HomeRiver Boise, a Certified Residential Management Company (CRMC®), in Boise, Idaho. Andrew has illustrated throughout his career his resolute commitment to delivering first-class results for clients, as well as consistently improving efficiencies and operations across his companies. Industry knowledge and a keen focus on technology has been a major priority for Andy. He has obtained four of the leading industry designations: Certified Property Manager® (CPM®) from the Institute of Real Estate Management (IREM®), Master Property Manager ® (MPM®) Residential Management Professional ® (RMP®), both from the National Association of Residential Property Managers ® NARPM®, and Certified Commercial Investment Member (CCIM®) from the CCIM Institute.

Volunteerism has been a major focus and joy for Andy, from service on the National Board of Directors of NARPM® for six years as a Regional Vice President, to National Treasurer, National President-Elect, and then his election as President of The National Association of Residential Property Managers (NARPM®) in 2015. Currently, Andy serves as immediate Past President for NARPM® and continues to offer ongoing counsel and insight to the Board of Directors of NARPM®, using his extensive knowledge and experience within the industry. Andy has also had the privilege of serving on other local and national real estate boards.

Andy also took a recent swing at Hollywood. As the Associate Producer of the Saratov Approach, Andy helped fund, write, promote, and deliver a national theatrical release of a full-length motion imageture that won multiple awards and returned an Internal Rate of Return (IRR) to its investors of more than 1000%. The feature was based on the true story of Andy and his missionary companion, Travis R. Tuttle, and their dramatic experience of being kidnapped and held for ransom by the Russian Mafia in March of 1998. Andy also wrote and help produce, The Story Behind The Saratov Approach: A Fireside Event in 2013, which is now available on DVD, Blu-ray, and Netflix, along with the “Saratov Approach.”

As well as his commitment to his business interests and wide real estate pursuits, Andy’s family is #1 in his life. Married to his beautiful wife, Shonda Propst, for 17 years, Andy and Shonda adopted their first son, Samuel Propst, in 2008. Further, the Propst family welcomed another new addition with their adoption of Brooklyn in 2011. Originally from Oregon and now proud to call Idaho home, Andy is also bilingual, being a fluent speaker of Russian, alongside English.
HomeRiver Group
HomeRiver-Boise

7 Comments

  1. Matt NA

    Pacific Heights deserves a spot on the list. I’ve thought of that movie many times when dealing with difficult or deadbeat tenants. Always reminds me to be careful and do things by the book.

    The Money Pit, is rightfully on there. I’ve seen some beautiful (from a distance) old homes that look like a great deal. Being a contractor I could spot wood rot under a nice coat of paint as well as old wiring, plumbing, etc.

    Thanks for the post.

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