The 2 Rules Every New Real Estate Investor Must Follow

by | BiggerPockets.com

You may ask yourself from time to time, how many lists can we possibly have? Or need? I should make a list of lists the world needs.

Well, maybe another day.  Today I want to give you a very short list. You must understand and accept every word.

Do not talk to a bank.

Do not look at the MLS.

Do not casually consider whether you want a SFR or a multifamily property.

Do not research what subject to means.

Do not pass Go.

Before you do any of that, these are two not-optional, mandatory, must-understand, can’t-be-avoided rules that every new real estate investor must understand:

Not-Optional Rule 1

Your significant other must support what you want to do. Otherwise, your life will be miserable and you will end up divorced. Or dead.

Been there, done that. It was not cheap. 

Related: Newbies: Want to Start Closing Deals? Consider Using the 10/4 Rule

Not-Optional Rule 2

Remember that other people don’t live like you. Some people are slobs. Some people smoke dope or pop pills. Some people have pets or are demonic tattoo enthusiasts. Some people leave candles burning on the mantle and leave to go to the grocery store allowing the flame to catch the nearby curtains on fire and burn the entire house down.

Even if it’s in the lease, it’s going to happen.

Here is my own personal worst-case hoarder story in a few photographs:

Related: The 50% Rule: How to Quickly Analyze a Multifamily Investment Property 

The good news is there is a well-defined, empirically-based coping mechanism for all this.

  • Yell a cuss word.
  • Get over it.
  • Clean it up.
  • Have a beer.

I love this business. 160+ units strong and wouldn’t change a thing.

These are the rules. Well, these are the two rules that you must get past before you consider all the other rules. The rest are just details.

Do you have other rules newbies should consider?

Share them below!

About Author

Jay Strickler

Depending on which day of the week it is, Jay is a 30-year oil and gas project manager and owner of about 160 rental units in three states. He harbors faint hopes of ditching corporate life someday to travel and spend more time with family and friends.

5 Comments

  1. William Dalton

    Jay, great simple to the point advice. Thanks for sharing. There’s so many things to consider as a lord of the lands. But keeping a basic, general, to the point mantra for advice can really help. I’m experiencing the first Not option #1 at the moment, and am constantly reminded of Not option 2. As far as not option 2; deep breathes and reminding myself of my 15-30 year overall picture/forecast really helps. As far as Not option 1, ….. I could probably use some advice. I thought it would be easy [(everything actually was)( I Think)] until now. It’s a work in progress for sure ! Keep dropping that knowledge Jay.

  2. Casey Culver

    Not Optional Rule #1 is the most important rule of real estate, or any business venture lol. Maybe…juuuust maybe, if you can convince him/her to get that first deal, watch the cash flow come in every month (or the lump sum if you flip)…then maybe he/she will come around.

    A little trick…don’t show those hoarder pictures to the significant other until AFTER it’s been cleaned, avoids unnecessary stress and bonks to the head.

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