I recently did a radio interview and this is a partial transcript from that conversation. Let me know what you think!
What is your Best Real Estate Investing Advice?
Don’t stop. Never quit. Never give up. You’re going to a hit ton of obstacles in this business – you CANNOT let them stop you. So many investors get stopped by either ignorance or fear saying, “this is just too hard” – “real estate doesn’t work for me” – “real estate doesn’t work in my area.” Then they get out! Don’t do that. Find someone who can guide you through. It could be someone in your REIA, another investor, an attorney, anyone successfully doing what you’re trying to do. Do what it takes to find answers to your questions. You don’t have to know everything today; you learn over time. Take the time to figure it out – but don’t get stopped.
Name on big obstacle.
Legislation – laws change and often investors don’t know their state laws or say “our laws don’t allow that” when actually they’re ignorant of the laws. The law may say you can’t do something a specific way, but you can in fact do it another way. Again – learn, find out, know – just don’t get stopped.
Best book you’ve read
I prefer business books because we run a business. If you have more than 2 properties, you have a business and need to treat it as such, rather than like a hobby. The great thing about business books is that most business needs are the same, no matter the industry. “The EMyth” by Michael Gerber is fantastic and “Think and Grow Rich” by Napoleon Hill.
Best personal growth experience and what you learned from it.
My best ever personal growth experience probably came from my worst ever life experiences. My three experiences were divorce and two extreme family health crises. One of the big things I learned through these was not to waste time – everyday is valuable, even the tough ones. Jim and I are so so busy every single day, our days are so full, but we love it because it’s all productive, it all serves a purpose, it serves others, and our activity constantly moves us toward our goal. We don’t have to be at our goal to enjoy life, just working for it and making steps brings us tremendous joy. Don’t sweat the small stuff because it really is all small stuff over a life span – it really does pass as time continues to march on. It’s precious, don’t waste it.
How I tie that into real estate is by pointing out that, if you decide to wait before you make a purchase, I promise that in five years you’ll be kicking yourself for waiting. Time is so precious.
Best success habit you practice
Not getting stopped. For that to happen, you must have a big enough “why?” You must have a big enough reason to be doing this business – and your reason’s gonna change. Starting out, our reason for this business was to provide for retirement (and of course I wanted to get to that sooner rather than later). Eventually, as we began to have income coming in for today, our reason became a better lifestyle for ourselves and our family along with being able to give more, which feels really good. Now our reason is to leave financial prosperity to our children and grandchildren
Best deal you’ve done
Our mountain house. About the time we started this business, we also bought a very nice house in our gorgeous North Carolina mountains. As it turns out, we just happened to buy it with private money because Jim was golfing with a friend one day and told him about a house we were hoping to get in spite of crazy lending regulations. When they finished golfing, his friend turned to him and offered to fund the deal. (We were shocked and amazed he even had the money – we’d worked with him and known him for years. If we didn’t have money, how did he???) Finding private money is easier than you’d expect – all you have to do is talk about what you do…
But, the point of this story is that this was 2005-2006 before the economy tanked. We bought the house and spent about $10,000 giving it a face lift. Shortly into owning it, Jim told me we’d have to sell as it was not generating cash flow and, with our new company sucking up cash, we couldn’t afford to maintain the mountain house. I was devastated, however… We agreed on a sales price, which I thought was high because I didn’t want to sell. It sold almost immediately. We had to set the closing date to a time when we would own it for 366 days. By holding it longer than a year, we would only have long term capital gains to deal with. We made $100,000 profit after loving it for 12 months. That was crazy huge money for us and we had super enjoyed the house and the mountains better than free all that time. We poured every dime of profit back into our investing business. This was another confirmation that real estate is an amazing way to make huge money.
(1) Don’t Think for the Seller
Before you buy anything, you must always know your numbers. Their numbers and problems cannot influence your offer or you’ll pay too much.
(2) Failure is Not an Option
When we started out, we were at an age where we didn’t have time for a failure.
And, that’s what has kept us overcoming hurdles and knocking down walls even today. Failure is not an option.
(3) Hope is not a Strategy
There are so many moving parts in this business. You can never hope things will work out or the economy will remain strong or property values will increase. You must KNOW your numbers, your response rate, all the dynamics of your business at all times. That’s the only way you can improve what’s working, eliminate what’s not, and know the difference.
What’s the biggest mistake you’ve made in real estate?
Being influence by sellers. It’s hard to not get caught up in the emotion of the moment and in their needs, but that can ruin your deal. One of our very first buy opportunities, Jim went to the sellers home and, later, when he walked back in our front door he said, “I just paid too much for this house.” The woman had recently found out she had cancer and, while Jim was sitting in the house talking with them, their attorney called to tell them their home was being foreclosed. She started crying and Jim wanted to help them out. You MUST know your numbers and stick with them. They are your numbers for a reason!!! You CANNOT be influenced by the sellers situation or emotion.