Frustrations With RE Investing

[Account Closed]

Hi everyone!

Some quick background info on me. I've been involved with REI since I was a child through my dad. He's a very successful real estate developer here in California and over the past 20 years, he's developed several dozen commercial and residential properties. I would visit all the sites with him when I was a child and saw all the properties go from an empty patches of land to fully operating businesses. I then later managed all his residential properties when I was in college.

I've saved for years and now that I'm in my late 20s (should have started much sooner), I'm ready to invest my own money and start my own business in RE. My dad is a great angel investor that I can used to fund my deals, and I've already learned a tremendous amount from him.

Problem is, I'm not seeing eye to eye with my dad. He's insisting that now is a horrible time to enter the market as prices are very high and that a recession is coming soon which will cause prices to drop, creating a great opportunity to buy. As such, I can't really convince him to fund any properties I'm finding. Furthermore, all his properties are in California (we live in LA) and he’s not keen on investing outside of CA.

I can't help but question my dad's strategy/advice. He acquired all his properties in the 90s and then again during the recession, so he's used to buying RE when prices are VERY low. He’s also an all-cash buyer, so his acquisitions were all done on a cash basis at times when cash really could knock off a tremendous amount from asking prices. He’s made many “low-ball” cash offers in the past and most have worked out; I don’t think it’s possible to do that anymore, at least here in California/LA.

Perhaps I’m wrong and I’m just being inpatient, I don’t want to wait anymore, I want to take action and I’m open to investing out of state, not just here in CA. 

My question is, do I listen to my dad and sit tight, or do I go against his advice and get into the RE market now? 

[Arlen Chou]

@Account Closed it is always difficult to follow in the steps of parents who have been successful.  Been there, done that and got the T-shirt...  What you need to learn to do is to see him as a business man, not your father.  By mixing the two you create conflicts of interest on both sides.  If he is an investor, then you need to approach him as such with the same detail (maybe be more) to planning and presentation as any outsider.  If he says "no", accept it as a business decision.  It is his money...  There maybe some "fatherly" advice thrown in, but you mentally need to accept it on face value as a denial from one business person to another.  Also keep in mind that he has been successful and you are just starting out, so weigh what he says accordingly.  I promise you that once you do this, dinner conversation will be much better.  But at the end of the day, it is your business decision.  If he does not invest in you, go out and cut your own path.  But make sure he understands that you are doing this while respecting his advice and concern.  If you go down your own path and become successful you will win respect.  What ever you do, remember that deals come and go, but family is what counts the most.