The Best of the Best Real Estate "Cliches"

[Matthew Irish-Jones]

For my savvy Real Estate investors out there who have attended the school of hard knocks.  What Real Estate Cliches have you found to be true, useful, or completely false. 

Here are my top 3 True Cliches:

1. Risk comes from not knowing what you are doing

2. Location, location, location 

3. You make money when you buy

[Jim K.]

I'm going to go with false ones here:

1. "Don't be a landlord, you're going to be unclogging toilets in the middle of the night." I have yet to unclog any toilet but my own in the middle of the night.

2. "You can't find good tenants in cheap properties." No, incompetent landlords just don't know what to look for, how to look, or even what they're looking at.

3. "Make sure your tenants have good credit scores." I could write a book on how misleading FICO scores can be down in C-class, and why.

4. "Don't buy old houses that are money pits, stick with stuff that's less than 40 years old." This is wildly untrue in Allegheny County, PA, where the absolute best-built single-families went up just before the Great Depression and the shoddiest tract builds in the county went up from 1970-1990. Once you properly square away a well-built Depression-era property in Pittsburgh, it stays squared away reliably much more than anything built during the Steel City Crapshack Era. You just have to know what needs to be done.

5. "My numbers are right and the home inspection looks good." Again, this is very much a lesson learned from C-class investing in old urban properties in the Rust Belt. Your numbers are simply not worth the paper they're printed on if you really need to rely on a home inspector to tell you about the property's build quality and condition. A home inspector should be a failsafe. You have to know something about housing if you're going to make money in housing.

6. "Work on your business, not in your business." First, know your business. You can work on ignorance only so long before it breaks you into little pieces.

7. "Get three estimates." When you are actually IN this business, you need to have trusted associates to work with. You need guys who are always THERE when you need them. You pay all your contractors WHATEVER THEY ASK FOR, and if they're not damned good at what they do and know exactly what they're worth, they're not worth working with. ESPECIALLY WHEN IT COMES TO PLUMBING AND HVAC. You will never lose more money than you will skimping on these two trades in your portfolio. After enough time in this business, most especially in C-class, you will worry routinely that you're not throwing your plumber or your HVAC guy enough work.

8. "(Pick-a-minority) tenants are the worst." The absolute worst tenants I've had have all been white, native-born Americans. There really is a level of insane entitlement, a height on Mt. Bull***t, that only white people can reach while everyone else languishes at lower altitudes. I've seen an overwhelming amount of utterly freakish craziness up close and personal, and I can confidently bear witness that white people always end up being the freakiest freaks of all.