The Best Thing I Heard at a Real Estate Meetup Last Night

[Jonathan Greene]

Me: "Where do you want to invest?"

Them: "Anywhere."

Me: <dies inside and throws up in mouth>

Them: "Cashflow, you know."

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No. This is not how you invest in real estate. You are just asking to be sold a bill of goods with no real value. New investors get so eager that they will react positively to anyone who tells them a deal has good cashflow, or cash on cash return, or <insert acronym that no one uses in real life>. Don't go to real estate meetups and be open to any investment. You would be better served leaving all your money on the counter and letting pigeons peck at it for a while.

If you want to be a real estate investor, you have to know which markets are good or at least ask smart questions of experts about why some markets perform better than others. This is the reason many fully open to the public RE meetups are boring for seasoned investors. Because even when you try and help, you get vague answers or regurgitated nomenclature from the BP forums.

There are always new investors in the forums asking questions. Some very good, with background of where they are and how much they know, and some very bad, literally "How do I invest?" The only way you will find a mentor in RE or at a RE meetup is to bring something to the table. Maybe you are new, but what skills do you have that could help someone? Are you willing to bird dog? What can you do for a seasoned investor besides just take their knowledge. If you know this, you will do way better than this guy did last night.

[Jonathan Greene]

@Josh Johnston if you are a new investor and a market is hot, it's not for you. A hot market means investors are already on it and therefore, prices for the dumps will have gone up. You want to find the market next to that or even next to that, one that carries the same potential trajectory as the hot market, just a bit further out. This should work in most areas, sometimes you have to go more miles than you had hoped, but at least you will be researching the next market while people with more money and experience are snapping all the deals in the hot market.

It's a mindset thing. You can't go to a meetup and tell someone you will invest anywhere if the cash flow is right. That's just asking for a "partner" who will sell you a bad deal. Too many new investors become almost desperate for their first deal when they still have limited funds to do the deal with. Everyone on here is in a rush to 100-units, but most people who try to go to fast are all broke now. Some have recovered from their mistakes and done it right on a second go.

Drive the neighborhoods. If there are lot of renovations going on, it's too late. Drive out one farther. And so on. Watch the prices decrease and the demand with it. Sure, if you have the money you can get into a hot market, but new investors overbid and under-estimate repairs and that does not go well.