When people ask me about my investments, which happens quite a bit (and I will share at the end of this post), I like to be completely honest with them and here’s why . . . You see, there’s a game most people in real estate like to play. I had to learn it very early on in my career, unfortunately. I made my debut into the real estate business when I was only 18 years old and was pretty much the laughing stock of my first real estate office I ever joined (because lets face it, I was a child). My headshot looked like something off of a missing children’s poster and people gazed at me with a deer in headlight look whenever I mentioned anything about technology or blogging to them (this was back in the early 2000’s long before the boom and crash). I was sort of the black sheep of a massive and wildly successful Coldwell Banker real estate office full of top producer and agents twice my age, who all seemed to have their ducks in a row. When you’re not yet jaded or burnt out from an industry that is known to suck every living fiber of passion, goodness and enthusiasm out of a person, you see things that many people don’t. Literally, from the eyes of a child.
The Game That I Refuse To Play
I started to find out that agents, mostly the seasoned ones, had to continuously keep up an act. My best guess at the time as to why they kept up this act was so that they could always appear to be in an upper hand position of authority and knowledge around their clients. So that people would think that they had all the answers when in reality, if you listened closely, they were getting by simply on hype and excitement. Those two ingredients mixed together form a fantastic BS soup that can be served up to just about anyone hungry enough to eat it and I was amazed at how many people would eat the soup. What amazed me was how everyone viewed authenticity as a weakness. It was as if the entire world of real estate agents was a concrete city built on stilts just waiting to come crashing down. When I looked around, it felt like I was stuck in a giant timeshare boiler room filled with people wearing masks to cover the smug grins on their faces while they played their game and raked in sales. At the time, I couldn’t figure out what was missing from the real estate industry but I knew that I didn’t want it to turn me into whatever kind of cyborg sales people was I was witnessing all around me. So I simply decided to always march to the beat of my own eccentric rhythm. That rhythm, I later discovered was called authenticity and it’s something I’ve personally vowed to always be in every aspect of my life. I decided that, if someone didn’t want to buy a house from me because I wasn’t knee deep in debt to look like I was successful, that wasn’t really the type of client I wanted anyway and they most likely wouldn’t value my time or experience.
The Road To Knowledge Was Paved With Mistakes. . . Big Ones.
So what does any of this have to do with investments you’re probably thinking? Well, it has everything to do with it. One real estate boom, one crash, one follow up boom, 3 election cycles, multiple business break ups and 15 years later in the real estate industry I’ve learned a lot about how important it is to be authentic about who I am as a person, an investor and a Realtor to my clients. I’ve made money investing in real estate and I’ve also lost money investing in real estate. I’ve paid too much for some houses, too little for others, flipped some, rented some, spent too much time worrying about losing money, been a day late a dollar short in some markets and one step ahead in others. I’ve taken massive risks and some paid off, some didn’t. The one thing I’ve never done is regret anything or taken the lessons from any mistakes for granted as they’ve been my best source of education I could have even received in both life and the real estate business.
But I Hate Selling Houses
So coming back to the present, to this moment of where I’m at and why I’m working in vacation rentals, it’s simple. I don’t love selling. At all. But I do love houses and traveling. I know how much people hate talking to real estate agents, it’s not a picnic for me either knowing someone already thinks I’m a sleaze canoe before they even meet me simply because I make my living in sales. The reality though is that I don’t want to sell you a house anymore than you want to be sold one and I wouldn’t dream of trying. It’s too much wasted energy to try and convince a person they want something that I know in my heart they don’t want or are not ready for. . . that’s called timeshare sales and no thanks. Selling is a verb that would require me to have to convince another person of something or change their mind. What I do is very different. What I do is educate and coach people to help them achieve their real estate goals of owning income producing properties. I present the facts and the relevant information that one needs to make a decision and I enjoy being able to use my knowledge and experience to help someone else get two steps closer to their goals and doing that as a team. If the numbers on a property don’t look good, don’t buy it! You don’t need me to tell you that and you certainly don’t need a salesperson to try and convince you that they do look good. That’s annoying!! So you see, I hate selling just as much as you hate being sold. We’re on the same page.
Vacation Rentals Saved My Life. . . Figuratively Speaking
Why vacation rentals? Easy. There is no other sector of real estate that offers a person this much personal satisfaction and financial gain that is shared with and experienced by their entire family as vacation rentals. Period. I’ve done everything in real estate from selling gas stations to enormous big wig investors when I was just 22 years old to working with Wall Street investors gambling on our housing market. I used to work with regular families moving up or buying their first home. Every day of my life felt like the worst day of my life when I was doing this type of sales. I wasn’t being authentic to who I was nor could I be authentic to my clients, I was wearing the mask that I promised myself I would never wear because if I took it off they would see how miserable I was and I was just doing it to make a living. And then, after an unexpected (and at the time unwanted) move to Orlando, I discovered vacation rentals and it felt like the first day of my career finally began. Most people don’t know this but, I was incredibly close to leaving the sales side of real estate completely before vacation rentals.
Here Are My Top Four Tips I’ve Learned Personally About Investing In Real Estate
So here’s what I learned about investing (as an investor) over the last 15 years. And I’m going to be very authentic and real with you, because I know you don’t have time for the facade anymore than I do. I also expect any of my brokers that I invest with to be just as real with me and they know it.
- Cook or Get Out of the Kitchen- If I had a property for all the days I wasted and excuses I made for not investing in real estate I would own more real estate than Warren Buffet right now. In my younger years, when it’s the most prime time for someone to take risks, I didn’t. I was scared. Yes, I said it. SCARED. I was selling houses all day long to people and they were making tons of money but when it came to my own money, I was so afraid of losing it. Fear of loss kept me imprisoned. I did buy my first house when I was 20 (primary residence) but I didn’t buy my first investment property until almost 5 years later!! Fortunately, I got in right before the boom. I see investors do this all of the time. They want to invest but they’re waiting for that “perfect opportunity”. The perfect time to buy is always 10 years ago. If you have the funds to do it, learn the basics, study the market you’re investing in, find the right people to help guide you and just do it. If you think too long about it you’ll end up wasting a lot of time like I did and missing a lot of great deals.
- The Stingy Bird Never Gets The Worm- I have done this and kicked myself for it many times!!! Pure ego takes over sometimes when you’re negotiating a deal, which is why I have always relied on my brokers to keep me in line when I’m working on my personal deals. You have a number in mind of what you’re willing to pay for the house and you won’t deviate from it but in most situations, the gain of what you could have made over the term of the hold far exceeds the loss of the few extra thousand you would be paying to get the property. Know your market, don’t expect homes to sell under market value if the market is strong. You’ll never end up with a property if you do this. Be prepared to pay market value in a seller’s market. If you’re in a strong location in a growing market in almost every case, you will make money over the term of a 5 year or more hold. I never lie to my clients about the market they’re in. If things are hot I tell them, “It’s hot right now”. It’s not a sales tactic. I don’t gain anything from a buyer having to work harder to get a house than in a down market. It’s actually more work for me when it’s a buyer’s market. So if your agent tells you that you need to come in strong, you should probably listen to them. I know I wish I would have on many properties I lost out on.
- Be Prepared To Walk Away- This might sound contrary to what I just said above but hear me out. For every 5 investors that miss out on a great property over a few thousand bucks because of their ego, there is a seller who thinks that extortion is an ethical and perfectly acceptable way of doing business. If you happen to land yourself in a situation where you KNOW (based on comps and real research, not your ego) that the seller is trying to gouge you because they know how bad you want the property, than be prepared to walk away. This is harder than it sounds because even though we say “take the emotion out of the investment” it’s typically very hard to do that. When you find that one property that has everything you ever wanted and generates a great income you’re ready to make the deal happen, until . . . the seller counters back at an offer 10 or 20K above market value. That’s a horrible feeling. It’s horrible because you know you have to walk but you don’t want to. You know how long it took you to find a deal that good. But walk. There will be another at some point. Just make sure that before you walk you’re not actually undervaluing what the house is worth. Poor research and bad advice could cost you really great deals. Be careful who you listen to and take advice from.
- Speaking of Advice- Your cousin’s, sister’s, uncle’s, step-brother’s, dad does not know more than your agent. I promise they don’t. The only time I was EVER grateful that someone talked me out of buying something that I wanted was that one time in Vegas where I ALMOST got sucked into buying a timeshare (the free tickets were so tempting). Other than that, most people have very little knowledge on a market they don’t live in or work in. If you’re investing somewhere that’s not local to you, chances are your family wants to try and help but they just don’t know much about the market other than what they read on the news. I have watched people lose INCREDIBLE (yes I screamed that word) deals because of that one family member who talked them out of it. And usually for some type of ulterior motive such as they want them to invest locally with a friend of theirs who is a Realtor or they want them to own a vacation home closer to them etc. Leave the advice to the professionals. Opinions are great but if you base your entire financial future on the opinions of people who most likely (and I mean no disrespect by this) are not where you want to be in life, than you can expect to end up like those people. If I’m taking advice from someone it’s because they’re successful at something I want to be successful at. Not because they like to speculate and sound important.
So What Do I Actually Invest In?
I mentioned above I would share with my readers what I’m currently investing in since I have a lot of people asking me lately. At this current time I’m really loving mobile home parks. I’ve spent about a year researching them and I really like both the immediate income potential as well as the long term gain. I just went under contract on one this week after missing out on about three others. I’m very excited as this will be my first commercial investment and I feel like a giddy child at Christmas time. I will keep you updated via my blog of how everything goes. I’m also looking for a vacation rental in Portugal for 2017. It’s taken me a very long time to figure out where I want to own a vacation home but after a trip to Lisbon in February I know without a shadow of a doubt that I belong there. So this year and next year are full of new and exciting real estate adventures for me.
I’d love to hear more about how I can help you with your real estate goals and if I can answer any pressing questions you might have about investing in a vacation rental. If you enjoyed this post, feel free to shoot me an email or leave a comment below. I’d love to get to know you better!! The way I see it is that we’re all in this together and the more authentic we can be about our goals and journey the more we can truly help each other grow. Thanks for reading!