Thread
What the internet gets wrong about real estate, a thread:
Smart does not equal successful.
Some of the dumbest people in the room (me included) weren't good students and don't necessarily have high IQs.
I believe being too smart is a disadvantage because you're more likely to overanalyze and get cold feet - never actually starting.
Some of the dumbest people in the room (me included) weren't good students and don't necessarily have high IQs.
I believe being too smart is a disadvantage because you're more likely to overanalyze and get cold feet - never actually starting.
Real estate is not passive.
The people who win and make a lot of money in this business are operators.
They RUN the business of real estate and lease units, market, hire, fire - just as any other business owner.
Things break. Tenants need things.
The people who win and make a lot of money in this business are operators.
They RUN the business of real estate and lease units, market, hire, fire - just as any other business owner.
Things break. Tenants need things.
Most real estate influencers spend 99% of their time trying to sound smart.
They purposely make things too complicated.
When you do this for a while you can tell if a property is worth buying with a napkin and 30 seconds.
They purposely make things too complicated.
When you do this for a while you can tell if a property is worth buying with a napkin and 30 seconds.
The problem with being a big real estate PE firm:
You need to do good deals year after year and deploy 10s or 100s of millions in capital.
It’s a hamster wheel making others wealthy.
The advantage of being you:
One building like this can change your life.
You need to do good deals year after year and deploy 10s or 100s of millions in capital.
It’s a hamster wheel making others wealthy.
The advantage of being you:
One building like this can change your life.
Many folks think they need to go too big and end up with too small of a slice of the pie.
Small deals with more in it for you is the better way to get rich and stay that way.
Small deals with more in it for you is the better way to get rich and stay that way.
Real estate is like hunting.
There are small windows in time when buying deals makes a whole lot of sense and other times when you just need to sit on a rock and wait.
Be ready to pounce and get aggressive when the window opens, but don't force it.
There are small windows in time when buying deals makes a whole lot of sense and other times when you just need to sit on a rock and wait.
Be ready to pounce and get aggressive when the window opens, but don't force it.
Buying real estate that doesn’t cashflow well because values have risen 10% / yr for 10 yrs while wages have risen 3% / yr for 10 yrs is very risky.
I don’t care how long your interest rate is “fixed” for.
Markets are cyclical. Trends change. Bankruptcy is real.
I don’t care how long your interest rate is “fixed” for.
Markets are cyclical. Trends change. Bankruptcy is real.
If you don't already have a lot of cash, real estate IS NOT the best way to make money.
Even a $500k property (like the one pictured above) requires $150k down and another $100k in cash reserves.
Even a $500k property (like the one pictured above) requires $150k down and another $100k in cash reserves.
Real estate is 1000% sales.
When it comes to raising money from passive investors, securing loans from banks and even buying property from owners and brokers.
You are selling yourself, your vision, and your competency 24/7.
When it comes to raising money from passive investors, securing loans from banks and even buying property from owners and brokers.
You are selling yourself, your vision, and your competency 24/7.
As a syndicator the terms of your deals are more important that the quantity of deals.
Big money investors will encourage you to do MORE AND BIGGER projects vs. smaller more profitable projects.
Can you guess why?
More money for them from your work.
Big money investors will encourage you to do MORE AND BIGGER projects vs. smaller more profitable projects.
Can you guess why?
More money for them from your work.
If you’re not well capitalized and you plan on using 65-75% leverage (or more god forbid), now is a terrible time to start buying real estate.
Commercial loans are on a 3-5 year term - so you could find yourself in a jam.
Commercial loans are on a 3-5 year term - so you could find yourself in a jam.
A few factors dictate 90% of your success.
The other 50 factors everyone tells you to pay attention to are noise.
Nail the big ones (operations, cashflow, tailwinds) and the outcomes take care of themselves (profitability).
The other 50 factors everyone tells you to pay attention to are noise.
Nail the big ones (operations, cashflow, tailwinds) and the outcomes take care of themselves (profitability).
If you aren’t resourceful you’ll never do a deal.
No two deals are alike. There will be thousands of questions.
If you can’t make decisions with incomplete information you’ll never even get started.
No two deals are alike. There will be thousands of questions.
If you can’t make decisions with incomplete information you’ll never even get started.
There is no get-rich-quick method to real estate.
It takes TIME.
It takes TIME.
Buying and selling real estate is sexy and you can get rich doing it.
But true generational wealth is created when you hold great assets for a really long time.
Figure out a way to structure your deals accordingly.
But true generational wealth is created when you hold great assets for a really long time.
Figure out a way to structure your deals accordingly.
Your goal should be to get some cash working in the deals as soon as possible.
OPM (other people’s money) is expensive.
If you can get to the point where you do your best deals with your own money, you’ll get wealthy fast.
OPM (other people’s money) is expensive.
If you can get to the point where you do your best deals with your own money, you’ll get wealthy fast.
The person with the cash calls the shots if they are the only person you can get cash from.
Cast a wide net. Don’t put all your eggs in one basket.
Get a lot of LPs in early deals and knock it out of the park.
The more investors you have access to, the better terms for you.
Cast a wide net. Don’t put all your eggs in one basket.
Get a lot of LPs in early deals and knock it out of the park.
The more investors you have access to, the better terms for you.
As you gain more wealth the goal should be to get more control over of what you need to go right to make a deal a good deal.
Things you can’t control:
Interest rates
Debt accessibility
What someone else will pay for your property
Depend on these things less to lower risk.
Things you can’t control:
Interest rates
Debt accessibility
What someone else will pay for your property
Depend on these things less to lower risk.
Your equity means nothing.
And it changes wildly based on things outside of your control (mentioned above).
Turning equity into cash isn’t easy.
Selling takes time and money.
Cashflow is everything.
And it changes wildly based on things outside of your control (mentioned above).
Turning equity into cash isn’t easy.
Selling takes time and money.
Cashflow is everything.
And rule #1:
Choosing your competition is the key to success.
The lucky thing for you:
There are a lot of folks making great money in real estate doing business like it’s 1985.
Choosing your competition is the key to success.
The lucky thing for you:
There are a lot of folks making great money in real estate doing business like it’s 1985.
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