September 2014

Hate About Landlording

I was cruising around the BiggerPockets Forums today and I stumbled upon a thread started by Karen M. titled “Tell Me What You Hate About Landlording.”

I thought it was a fascinating discussion – to see what some people consider the worst or best parts about Landlording. After all, we landlords tend to get into this “real estate investing is awesome!” mentality (bloggers, like me, are most guilty of that!) and love to talk about the good stuff… and often times the hard stuff gets ignored because no one likes a complainer.
Well… I’m going to do some complaining!

It’s my hope that this post can serve dual purposes:

a.) Help others get a realistic vision of what landlording may look like and
b.) Hopefully generate some incredible discussion in the comments.

Let me preface this article with this:  I already know about 20 people are going to put a comment below that says “this is why I use property management.” I agree – many of these problems (not all, but some of them) would not affect me if I had a property management. However, any honest real estate investor who uses property management could easily come up with a list of their own of 12 things they hate about investing in real estate. Arguing property management vs. self management is a topic for another day. The fact is: I am a landlord.

Finally, if you are reading this, I would LOVE if you do me a favor and comment at the bottom of this post, offering me (and everyone else reading) some advice to help overcome some of these issues.  Also, let me know what you hate the most about Landlording. I look forward to seeing what you have to say!

Without further suspense, I give you: 10 things that I absolutely HATE about landlording.

1.) Never Truly Taking a Break

(click to continue reading on BiggerPockets)

 Why Are So Many Real Estate Investors Going Bankrupt?

They started investing in real estate 30 years ago… with so much hope for their future.

A rental house here, a duplex there… and soon they had a rental portfolio anyone would be proud of. They actively managed their properties and worked to make sure they were operating at peak efficiency.  Several years ago both the husband and wife retired from their day jobs and eased into retirement – funded by their rental income and social security.

This year they are filing bankruptcy and losing a majority of their properties to foreclosure.

This is not some made-up example… this is the story of one of my best friend’s parents, and they are not alone.  In fact, 95% of the properties I’ve purchased have been foreclosures purchased from landlords who have failed and lost their properties in a foreclosure. Most of them, I would guess, will never again get into real estate investing.  They worked hard for years to build a financial future for themselves, only to see it come tragically crashing down around them – dashing any hopes for lasting wealth creation.

This begs the question: why? 

If real estate is as good of an investment as we all (on BiggerPockets) make it out to be… why do so many real estate investors fail?

Perhaps more importantly: how do I avoid this possibility in my own life?

This is the question that has been swimming around my mind for some time now. Each week on theBiggerPockets Podcast I ask our guest “what is it that sets apart successful investors from those who fail?”  I’m intrigued by this idea and scared that I may end up the same way. After all, as Mark Cuban famously said “everyone is a genius in a bull market.”  Is that what real estate is? Do some people simply get lucky, and others not so? What are some of the trends that lead to this failure… and what are some trends that can minimize this risk?

(Click to read on BiggerPockets…)

Should I Invest in Real Estate

Real estate investing is not for the faint of heart.

The television shows make real estate investing appear glamorous and thousands of books have been written on the topic all showcasing how awesome investing in real estate can be. However, although I believe anyone can invest in real estate, I don’t believe everyone should invest in real estate.

This post is going to explore this topic and help you decide if real estate investing is right for you.

Let’s Get on The Same Page About Real Estate Investing

First, I think we need to set some ground rules for this discussion.  When you hear the words “real estate investing,” what pops into your mind?

Some think of “house flipping,” likely because of the television shows where investors rehab a home and make an incredible profit. Others think of “landlording” and dealing with the hassle of tenants. Others think of investing in real estate like the stock market, through REITs or through Crowdfunding.  This is perhaps one of the most confusing aspects of the real estate investing world: the blurred line between the business or real estate vs. the investment of real estate.

You see, real estate can produce a profit through active means or it can produce a profit through passive means.  In my recent article, “Is Real Estate a Good Investment?” I used the following photo to explain this concept. Every niche and strategy falls on a different location on the “scale of passivity.”

(click to continue reading on BiggerPockets)

How to Buy a Duplex

This morning I received a Skype video message from my little brother Chris.

He asked, “I want to buy a duplex, what is the first step? Do I get a real estate agent? Get pre-approved? What should I do?

Of course, I gave him a few resources to read that I had previously written, like How to Buy a Rental Property in the Next 90 Days and How to Hack Your Housing and Get Paid to Live For Free but then said to myself “self – (that’s what I call myself)… it’s my brother and I really want him to succeed. So why not make a blog post directly for him that helps him get from A-Z?

After all, my first rental property was a duplex and I’ve purchased several since that day.  I love duplexes and I’m super passionate about helping others get started with duplex investing as well. So that’s what I’m going to do today, for the benefit of Chris and the BiggerPockets audience.  In this post, I’ll talk about:

  • Why Buy a Duplex?
  • What’s the First Step?
  • How to Find a Duplex
  • How to Analyze a Duplex?
  • How to Finance a Duplex
  • And a lot more.

Keep in mind, while the focus of this article is on a “duplex” – the exact same information can be used to buy a single family house, a duplex, a triplex, or a 4-plex: so don’t limit yourself to just a duplex. In fact, if you are going to go through all the work of finding a duplex, you might as well consider the larger properties (3 or 4 unit) in case a better deal can be found this way.

Furthermore, I’ll be approaching this article from two places:

  1. Someone looking to buy a duplex and live in one-half of it
  2. Someone looking to just buy a duplex as a full rental.

Whichever of these two positions you find yourself in, I believe this article can help.

With that, let’s get to the article. The following is “How to Buy a Duplex.”

Why Buy a Duplex?

(click to continue reading on BiggerPockets)

Elevator Pitch

(The following is an excerpt from the soon-to-be-released BiggerPockets book we keep talking about… it’s almost here!)

THEM: “Hey Brandon… So what is it you actually do?”

ME: “Well, I, uh… I invest in real estate… and… um… so… what about you, what do you do?”

Ugh. It’s embarrassing just to type that, yet for years that was my answer to the dreaded, “what do you do?” question. I mean, how do I explain what it is I do, and open the door for people to invest with me, without sounding like I’m bragging and begging?

It wasn’t until I sat down and spent some time working on my answer that it began getting easier. In fact, it didn’t take long at all. When I really sat down to work on it, I crafted a pretty-darn-good pitch in just 10 minutes.

So let me turn the tables… how do YOU answer that question?

Let’s find out.

ME: “Hey… [insert your name here]… so, what do YOU do, anyways?”

YOU: ________________________ …

Does this question make you a little uncomfortable? Rather than stumbling through an answer, this is your moment to shine. In fact, not only is this a great time to share what you do, this is perhaps the best place for you to actually raise money.

This is your elevator pitch.

What is an Elevator Pitch?

(Click to read on BiggerPockets…)

Passive real estate investing

I want to apologize.

You see, BiggerPockets has a LOT of information. Like, more than you could ever hope to read in your lifetime, and that’s growing every day.  Now, while that seems like a great thing (and it is) it does have a negative: shiny object syndrome.  And I’m part of the problem, with my blog posts, podcast contributions, and forum posts.

Sorry.

But I know the same thing happens to me. I hear a Podcast guest chatting about their strategy for doing this or that and suddenly I’m intrigued and want to do it also. From flipping to wholesaling to turn key rentals to direct mail and more, I just love learning these new strategies. I love the hustle that these real estate investors have and their commitment to building a big business through real estate.

It’s SO exciting, isn’t it?

But what about those strategies that no one talks about? The not-so-exciting ones? The old-fashioned, simple buy and hold real estate for building wealth?

That’s what I want to focus on today: simplicity. What would happen if you just invested in real estate, simply?

Well, let’s find out!

(Click to read on BiggerPockets…)

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