After 45 + Years in Real Estate - What Works and What Doesn’t

[Don Konipol]

What works - 

1. Investing in well built properties that are able to generate positive cash flow with current rental rates

2. Becoming knowledgeable about a sector or sectors or geographical area (s) and limiting your investment to those sectors or areas

3. Developing a track record of successful investments and leveraging your track record by syndications or creating an investment fund

4. Judicious use of leverage (debt) when the property will still cash flow positive after debt service; when there’s enough equity left in the property to refinance if advantageous, and when sufficient reserves are held to cover vacancies, recessions, and unexpected repairs

5. Understanding that SPECULATIVE investments should be only a PORTION of your total portfolio, and should only be money you can afford to lose.

And what DOESN’T work

1. Investing in sectors you know nothing about - even if you think your “partner” has expertise

2. Paying $40,000 for “mentorship’s” which teach you nothing about real estate principles, real estate finance, or real estate law

3. Having no experience, capital or expertise and thinking your going to be successful setting up a “wholesaling” business

4. Chasing the latest “hot” real estate market, trend or location to invest in

5. Investing 100% of your liquid assets as a down payment and having no reserves to carry you through the rough patches.

6. Expecting other people to solve your problems

7. Expecting inexpensive (cheap) property management to be competent 

8. Expecting brokers to inform you of the best purchase opportunities when you have no proof of funds, or pre qualification for funding 

9. Expecting to get accurate answers to complex legal questions on a public forum so you can safe the $275 consulting fee of experienced legal counsel 

10. Expecting real estate prices to continually rise with no periods of decline. 

[Jay Hinrichs]

One thing to add.

Kind of decide are you going to get into the business or just be an investor.

Makes a big difference..

And by that I mean do you expect to start off and in 5 years real estate creates all the income you need to live and support your family and lifestyle ??

Or is your goal to simply add RE assets for a long term retirement plan. And keep your chosen profession.