Real estate investors are generally an optimistic group of people. But are they always being transparent? Are they reluctant to share facts about real estate investing that are not so wonderful? In this revealing episode, Bill bares it all — the good, the bad and the ugly of real estate investing as he sees it.
You’re probably wondering why in the world I would start with such a strange and funky title for today’s Fun Fact Friday podcast. Well, I have to say, this may not necessarily be the “funnest” Fun Fact Friday but it’s something that needs to be addressed anyway. In fact, what I’m to share today may even hurt a bit.
If you’ve been listening to this podcast for a while, I hope you know by now that it’s really important that I be completely honest and transparent with all of you. One reason… if not the MAIN reason I started this podcast, is to be a source of credible real estate investing information from someone who isn’t selling something, not looking for the “upsell opportunity” and isn’t afraid to tell to tell you something negative about real estate investing in the fear that you might not buy my programs, seminars or high-priced consulting service (which I don’t have).
First off, I will be the first to say, I don’t have all the answers. In fact, in many ways, I’m still a student – in the trenches, still learning the ropes in real estate investing. I just happen to be blessed with talking to some of the top real estate investing professionals on the planet on a weekly basis on my podcast. But on Fridays, I share with you my wins AND my losses in the hopes that I can prevent you from making a wrong move or mistake that might cost you. But I also understand that the mistakes are part of the package – part of the “school of hard knocks” — an educational process that we all must go through. Something we don’t like but, at the same time, we should embrace because these challenges as part of the learning curve — where we’re all learning how to do this real estate thing right!
Can we just get real here? I don’t ever want to mislead or misconvey what real estate investing is or is not… and that’s the real the reason I’m having this podcast today!
I value transparency in others and especially with other businesses I deal with on a day-to-day basis and I wouldn’t expect any less from this show. I’m just a regular guy, trying to make this thing work, just like you! What you see is what you get! Pimples and all! I’ll share the wins as well as the losses.
But before I get all “doom and gloom” on you, I will be the first to clearly say that, despite the challenges, I still think real estate investing is one of the best – if not the best – investment vehicle out there! And I have a long list of why I love this crazy world of buy ‘n hold, rental properties and cash flow!
So, what I would like to do is share with you a few of the realities or, as I might say here “True Confessions” of real estate investing that you need to be aware of going forward.
The real “Freedom” comes when you have enough properties and income that you can A) not feel it when a major repair happens, flood hits or they close the military base that supplies you with 50% of your tenants. Or B) you make enough money that you can hire others to deal with the headaches while you lie back on the beach in San Tropes on autopilot and let them deal with it! haha.
How to do that? Make your “freedom number” – the goal amount you need to live comfortably – be TWICE what you actually need. That way, if your goal is way over what you need to live, then, when you fall short (and you will) you may be disappointed but won’t have to suffer too much from it
You’ve heard of the Peter Principle: What can go wrong will go wrong! Well, what do you call it when something goes wrong that you NEVER anticipated! (I call that the “OD Principle” – stands for Old Dawg not overdose). And it basically says, “Things can and will happen that you never expected.” We can do our best to strategically plan for all kinds of outcomes, but sometimes things will happen that were never part of your Plan B,C,D,E or F.
Case in point:
Bought these turn-key properties in Memphis when I was very green
“Section 8 is Great!”
“Section 8 definitely has its problems. But it’s Great Until… it’s not!
The Housing Choice Voucher Program is funded through the federal government’s continuing resolution. As a result, there is a potential funding shortfall for the remainder of 2017-2018 operating cycle, which may cause a delay in the U.S Department of Housing and Urban Development (HUD) providing our Housing Choice Voucher funds.
What does that mean? We are not going to receive any rental income on those properties until this issue is resolved AND I can’t kick out the tenants as long as they are paying their share of the rent due!
Wow! That was not something I planned for!
Well, that’s my list of a few “Let’s Get Real” confessions for you. And there are and will be others along the way.
My point here is not to be negative but to NOT BE BLIND either going into this endeavor! There are and will continue to be challenges. But, you can mitigate these challenges by educating yourself, getting good advise, planning well listening to podcasts and networking others that share the good, the bad and the ugly!
Get a well experienced mentor who has been there and done that!
Network with other investors and learn from them!
Write and follow a strategic plan and review and revise it as necessary. And try to stick with it as best you can!
Yes, real estate investing has its challenges! But overall, I still feel it’s still the best option out there for me.
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