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0 pointsraintrees9y ago0 comments

Warning: I love to teach, so I may get verbose :)

Real Estate works for us, more than paper assets, and less day to day time requirements than building a business for sale (exit plan) or that someone else operates for our profit. Everyone is different, YMMV.

Education is key. If you would hire a coach for exercise/strength training in a gym/fitness club, then I would highly recommend hiring a coach for real estate investment. As I stated elsewhere in comments, we went over the same material (and more) in 6 months with a coach that it took me 3 years to piece together on my own.

Patience - We were not ready to actually purchase our first piece of property until almost 4 years after we started preparing. Preparations for us included making our credit report as beneficial to us as possible, learning about the responsibilities of being a landlord, learning about the job duties of a property manage (even though we sub that out, we still want to know what is appropriate and what is not), learning about negotiations (did you know you can include almost anything in a buy/sell contract? "We'll pay $x and this 320i BMW in return for that piece of property" is a deal I heard referred to by another real estate investment expert), learning about the legalities of business entities with respect to real estate ownership, and so on. Now we just save up for the next down payment, then start looking for the next deal. And although there are ways to get into deals without a large (or any) down payment, they usually require considerably more effort and time, and I have a service business to keep going. So we do it the more lazy/easy way, with cash and financing.

Due diligence - It is better to walk away from a deal that I just can't make cash flow enough, than to get stuck with a poor/sub-performing investment. We walked away from quite a few deals, even though there were several I was relatively sure I could make work. On-site inspections have uncovered many potential gotchas that would have been financially painful. Some landlords extract the most profit out of an investment they can, and this can frequently result in much deferred maintenance, which can get very expensive very quickly. And like a start-up, you can only sustain a given burn rate for so long, before the deal crashes.

Teamwork - Although I have been gifted with what intelligence I have, it is not a good thing if I am the smartest person on my team/in the room. We all have different strengths, and I am not good at everything, so I try to surround myself with teammates that provide those missing/weak areas I have, as well as mentors who have already gone down that road. Having a good property manager go over a property will help me identify concerns, see places for improvement, etc. Having a reliable contractor (I am still looking for my next one, last one wasn't a good fit for us) can keep me out of those large up-front costs. A knowledgeable attorney for real estate investment in the area I am investing in is very important - It would be terrible to build up a portfolio then lose it all because I did not adequately protect ourselves (entity + insurance + operating practices).

Okay, enough. Sorry for the deluge, but I really _like_ the process of real estate investing.

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4 comments · 2 top-level

stevenwiles9y ago· 2 in thread

This is great, thank you for the response. How would someone go about finding a "coach" for this sort of thing? I have to imagine if anyone has knowledge to share about how to get rich doing a thing, that they would want to keep that information (and money) to themselves.

raintreesOP9y ago

Not necessarily - Some are fulfilled by giving back to community. I am currently reading Hazlett's "Capitalism With Morality" because I would prefer to assist as many in my community as wish it on how to practice commerce/exchange in win-win scenarios, rather than zero sum. I meet with Non-Profit Leaders in my community and I am not alone in this way of thinking.

There is also a large contingent who make a profit by coaching, so there is a sizable pool of those types of people/firms, as well. As long as I know from the outset what the motive is from the potential coach/firm, I can weigh what I am told to decide if it has value or not. Example: Free class? Usually has something hidden. Class on xyz for $399? Material more likely to be upfront, and of course a possible "up-sell" to more classes.

A sad fact (to me) is so many people do not _do_ what they learn about, that I do not worry very much that I may lose a prospective deal to a fellow student/coach. In fact, I would benefit from more people practicing investments like this in an ethical way, improving my community, as well as possibly conditioning people to expect proper deal making practices in my area.

Also, as I just alluded to, real estate is a very _local_ endeavor, so a mentor/coach may be from a different area and may have little interest in opportunities in the area you look in - Which may or may not be the area you reside in.

Two of the coaches I have hired in the past come from The Rich Dad contingent. Kiyosaki has garnered much attention, negative and positive, so if you pursue them, do so with your eyes open. I think he is sometimes a jerk in some of his presentations, but most of the time he is conveying basic knowledge, and I have found much of this knowledge from other sources, outside of his organization. It is one of my tenants that if I get the same information from multiple distinct sources, there is a higher probability it is an underlying truism or is at its base likely sound (or at least based on sound information). But do keep in mind they run a for profit company, and one of their items for sale is more classes/coaching.

I live in California, so another source I have looked at for like minded people (and their source of coaching/information) is the California Apartment Association, as well as North Coast Rental Housing Association. There are very likely similar agencies in your area/country to find other people who share your interests.

I periodically stay in touch with some of the people I have shared online classes with, so those communities can be built and be a source of information, as well.

I have heard it repeated that there is a large amount of money chasing business deals right now, one way of being involved (and earning some of it) is learning how to put those deals together.

But I have only gotten out of it what I put into it...

stevenwiles9y ago

Thank you for your well written responses and the time you spent writing them. You've given me lots to stew over.

raintreesOP9y ago

Teamwork p.s. And tax planning! Having a good tax planner/accountant (not always the same person, but must be in sync if not the same) is important for keeping any of the profits made by utilizing the incentives in my country's tax code.

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4 comments · 2 top-level

stevenwiles9y ago· 2 in thread

raintreesOP9y ago

I periodically stay in touch with some of the people I have shared online classes with, so those communities can be built and be a source of information, as well.

I have heard it repeated that there is a large amount of money chasing business deals right now, one way of being involved (and earning some of it) is learning how to put those deals together.

But I have only gotten out of it what I put into it...

stevenwiles9y ago

Thank you for your well written responses and the time you spent writing them. You've given me lots to stew over.

raintreesOP9y ago

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