Father does not approve of my goals in REI

[Grant Music]

Wasn't really sure which category to put this under, but I've had two pretty heated discussions with my father about entering into real estate holding. To be fair, he has been involved in real estate for decades (owned a manufactured homes company, flipped homes for a few years, etc.), but he is absolutely convinced that there's no way I could buy lower end homes in my city to rent without ending up bankrupt. His fear is that anyone I would be dealing with would be such lowly people that they would do too much damage for me to make a profit, or won't pay rent, or that I won't be able to actually keep it rented and will end up in foreclosure. When I tell him all of the ways you can account for these things and budget it into your expenses to make sure you still come out on top, his counter is "then why isn't everyone doing it?"

I told him about the REI meetings they have in our area where local RE investors support each other, give advice, network, etc. to basically say "tons of people are doing this," and his first conclusion was that it must be some "investing club" that's trying to steal my money and convince me to buy real estate from them so I take on the risk and they try to get in on the management side to take a cut. Nothing of the sort happened. The one I went to last week was a meeting of about 60 people and it was almost awkward at first because no one was that acquainted and they all made small talk about their different investments before an experienced investor gave us a small presentation on how to best run your LLC to protect yourself and your assets (didn't plug or ask for anything more afterward and even gave us a checklist for things to make sure you've accomplished for your LLC). A guy next to me that I spoke with told me about his 12 properties he owned out right. He advised me to take things slow if I got into investing and to wait until I had the money to buy things out right like him. Does this sound predatory or fraudulent? It seemed to me like a friendly group of people with similar goals and willing to share advice.

I understand I'm an adult and I don't need my father's approval for something like this, but it's just very frustrating how resistant he was to the idea. He got so mad during our second conversation about it, he stormed off. To me it seems like his arguments were all scare tactics and heuristics ("I'm almost 60 years old--I've been around to long enough to know these things don't work" or "talk to A, B, and C about this and see how it worked out for them"). The guy is worth hundreds of millions, so it's difficult not to take his opinion very seriously--it's making something I was very excited to get into feel like this enormous risk that I won't end up pursuing if I keep getting this lecturing about it. Any advice on how to handle this?

[Dale Carlson]

I feel your pain.  i really do.  my mother in law called me a slum lord when I shared my real estate vision.  Which i absolutely despised.  she even made a comment that i was going to lose all our money and they would have to pay for my kids college education.  You are absolutely correct that you do NOT need anyone's validation to pursue your dream. 

I am 47 and at the point in my life that if i dont try it, then it isnt going to happen.  I would now prefer to fail spectacularly than not try at all.  

To counter your father's own question "Why doesnt everyone just own a McDonald's?"   They certainly make money.  

Fear is why everyone doesnt do it.  I think there are definitely risks involved in lower end rentals, but as you said they have to be accounted for.  And you can put safeguards in place to ensure payment or minimize risks.  I actually think that if you are careful about who you place, you can actually get people who are likely to be long term renters.