In almost every real estate club there is at least one openly jaded, grizzled, confrontational, very very seasoned investor that everyone respectfully listens to because of his or her extensive real estate experience. In reality this investor has likely made nearly every mistake in the real estate play book and he/she will likely admit so. Have you ever met this conservative “wet blanket” investor? Are you this investor?
When I first began investing I quickly identified who these seasoned folks were in my investing community and I wanted to know what they knew. The knowledge many of these cautionary investors can bestow to you can figuratively become gold in your hands. The trick is to sort past many of the antagonistic real estate comments to get to the real GEMS of what is being said.
I was so fortunate in the middle and late 2000's to learn 1-on-1 from some of the top investors in my area, all of whom where decades older than myself and could be described as shrewd and admired investors. Below is a short list of lessons I have learned that have changed my investing life once I knew to read between their “experienced” lines.
Quote 1.) “You can teach a pig to sing, but it's a waste of time and annoys the pig.”
Although you may personally find this imagery cute–as I do–there is a very real side to this saying. Realize that every audience you speak to is different. A huge emotional drain and struggle is investing time, money, and energy into a bad real estate deal, buyer, partner, associate, fellow investor, friend, significant other, contractor, or seller that doesn't want the help or doesn't want to change.
People are NOT created equal; each of us have unique and inherit skills, talents, likes, and dislikes we base every action of every day by. The lesson here is, “Realize who you are dealing with at any given moment and recognize their level of involvement.”
How I use this saying most? When screening tenants and dealing with current “late-paying” tenants I realize that if a tenant has a proven and verifiable track record of being late with payments (to me, their past landlord, credit cards, etc) then they are “late-payers” and I will not work with this type of individual if I do not have to. I will not try to force or bully this person pay on-time as this would annoy them and myself too.
Saying 2.) All handyman and contractors are crooks.
No disrespect to any of my contractor friends reading this right now. Learn from a professional and experienced rehabber or contractor how to deal with contractors. Like car mechanics, some handyman and contractors have a bad-wrap for taking advantage of investors and non-investors alike. Reading other articles on REIclub.com will help you with testing, screening, negotiating, hiring, and dealing with repair professions in the future.
My mindset: If there is ever a rehab job that can be performed by one laborer I will only hire the one laborer and NOT a crew. The reason for only needing one handyman vs. a crew is that it is human nature for two or more workers to lose the ability to focus while a friend is with us–1 handyman can do about the same amount of work in the same time as 2 or 3 talkative and unfocused handymen can.
Learn by being proactive and spending time in a local hardware store to evaluate material costs and attending how-to class' put on by these stores for their patrons.
3.) When you direct a specific question to these investors you always here… “It depends” as the answer.
This is one of the BIGGEST lessons I have ever learned. When you are asking for help or advice from any other investors be as specific as possible. Real estate is such a wide open and grey area of business that often times the best answer to many real estate questions is “it depends.” Each deal is unique, each seller is unique, each investor and buyer are unique. If 10 investors ask the questions below you are likely to see 10 different answers. The one that applies to all is “it depends…”
- Example: At what point do I retire from my job and live on my cash-flow?
- Example: Is this deal good?
- Example: How should I find homes for sale?
- Example: What is the best way to find vacant mobile homes?
All the answers to the example questions above are “It depends” because all of these questions need more info before a thorough evaluation can be given.
My mindset: When you ask questions to others or yourself be specific to the situation at hand and do not look for a “one-size” blanket answer to fit all situation. Real estate changes from deal to deal, investor to investor.
The sage advice above is only a fraction of the great one-liners uttered daily by experienced investors around the world. Please share any other great tips (perhaps wrapped in an odd saying) with us below in the comment section.