Real Estate Investing - Many Ties to Entrepreneurship

[Account Closed]

Hi all,

I've been lurking around on BP for probably close to a year now.  Closed on my first deal in southern California (duplex) last summer.  Most of the time I've spent on here has been learning and asking questions so I wanted to take some time today give something back: a key lesson I did not expect to learn that I think many newbies like myself will find valuable and more seasoned investors will nod at.

The first thing I'll say is that going in to do your first investment is always going to throw you at least one curve ball.  Learning about real estate - whether it is on here or in an actual classroom - does not 100% prepare you for the realities and things that can go wrong.  People can tell you how much work it is, but you don't truly appreciate it until you get out there and start doing it.  At least that was my experience.  Severly underestimated how much time and energy I would put into it!  Fortunately it has had a massive payoff financially.

Anyways, onto what I wanted to talk about.  Entrepreneurship.  I never thought that investing in real estate for the first time could have so many parallels to the stressful process of starting a business but looking at the past year it is remarkable how similar it seems.  I think it is common knowledge now that in starting a business you can expect the first few years to be very painful - long hours, up worrying every night over all the things that can go wrong, unexpected turns of events, near bankruptcy/failure, etc.  But those who weather the storm can hope to come out at the end with a profitable and successful business.  I found quite a few similarities in closing my first deal.  Definitely long hours for the past year between identifying the opportunity, navigating the escrow process, rehabbing the units, and getting them rented out and maintained.  Lot of worrying for sure.  Everything from unexpected maintenance issues to concerns over things like earthquakes, insurance, and encountering litigious tenants in the future.  Unexpected turns of events and failure?  Definitely had a few curveballs, such as a prolonged court case between seller and prior tenants during escrow and unexpected required repairs coming up during rehab.  I wouldn't say I've come near failure but the first year has definitely been in the red financially.  Roughly $40k in rehab and counting. 

But looking forward now it is great to see the light at the end of the tunnel.  Within 2 years these expenses will be recovered fully and rent from the two units will be almost double the mortgage and property tax.  So the reward is there for those who trek through the rough times.  Keep going at it

Hope this adds one more piece to the puzzle for those of you starting out and would love to hear similar stories from others that successfully made it through their first deal.

P