Bowling or Basketball?

[Peter Sanchez]

Investing in Real Estate (or anything else) is like playing sports.  Whether you'll be good at it depends on your attributes.  If you're short and overweight, you won't be a professional basketball player, but you might be a professional bowler.  

It doesn't make any more sense to say everyone should buy and flip than it does to say everyone should be a kickboxer, or everyone who goes to the doctor should get penicillin because it worked for you. 

If you want to think about what kind of real estate investing you should do, think about how you feel about debt. If being leveraged to the hilt is something that keeps you from sleeping at night, then think about things like wholesaling where you aren't borrowing money and you are trying to get base hits instead of home runs.  If debt doesn't bother you, then get mortgages, second mortages, hard money, whatever makes sense to you. 

In my first condo, and the live-in flip that I own now, most of the appreciation hasn't come from doing the actual work to improve it but from sitting on my *** and waiting.  If you are impatient, this isn't for you, but you are not me. 

When I buy stocks I use what is a called a value investing approach.  I don't look to find the next Facebook, I look to find something that is undervalued and won't lose money. I'm not looking for a lottery ticket that will pay millions, just to keep steadily buying dollar bills for fifty cents and waiting. I'm sure some of you will get rich faster than I do, and that's fine.  But some of you will blow up and end up broke.  That's not a risk I'm willing to take.  I don't mind taking risks as long as failing won't take me out of the game. 

I also don't like aggravation, so when I'm done with this house I'm living in, I will not be renting it out and dealing with tenants.  I will sell it and move on. Screening your tenants can help avoid a lot of problems...so can not having any tenants at all.  

What about you?  Do you think your investing style matches up with your personality?  Is there something you could do differently to help you sleep at night?