What Have You Completely Changed Your Mind On in Your RE Career?

[Will Gaston]

All:

I've recently passed my 15th anniversary of buying my first investment property and have been reflecting on what I've done right and wrong in those years. One thing I've thought a lot about is how I've done a complete 180 on several things since I started. Three big things come to mind:

Then: Negotiate hard on everything, especially with contractors. 

Now: Pay contractors what they're asking.

Then: Argue with tenants about what to fix and what not to fix.

Now: Fix everything. 

Then: I want the lowest interest rate possible.

Now: I want the easiest bank to work with.

I think my investing career has gotten easier and more fun since I've changed my mind on the above 3 items. What have you completely changed your mind on since you've started investing?

[Nicole Heasley Beitenman]

Seconding @Anthony Gayden. I was all about MFHs until I started running the numbers on them in my area. The price is higher and the rents are lower. I also thought 2BRs/3BAs were the ultimate choice for a rental. But my 2BRs bring in just as good returns with fewer tenants and fewer headaches. Finally, I thought I wanted to BRRRR. Now, I just look for low-cost turnkeys.

[Anthony Gayden]

@Will Gaston

Great thread idea. 

I will say that when I started I was dead set on multi-family investing. I even looked down on single family home investing. Well I have completely changed in that aspect and have a new appreciation for single family rentals. 

The thing that I like the most about single family rentals is that it is dominated by small landlords. There is a lot of money to be made due to the inefficiencies. 

[Brian Ellis]

Its only been a couple years for me. But within that couple years I have realized I actually want to make it a career, not just a side hustle anymore. 

Too much passion in it not to. The only problem is finding a way to make that transition, while paying the bills.

[Nicole Heasley Beitenman]

Seconding @Anthony Gayden. I was all about MFHs until I started running the numbers on them in my area. The price is higher and the rents are lower. I also thought 2BRs/3BAs were the ultimate choice for a rental. But my 2BRs bring in just as good returns with fewer tenants and fewer headaches. Finally, I thought I wanted to BRRRR. Now, I just look for low-cost turnkeys.

[Frank Wong]

Hi Will,

Great list and all true. Not sweating the small stuff and focusing on the big picture and long term really makes things easier. I'll add go for more base hits not everything has to be a home run and you can make a fortune just getting on base.

[Will Gaston]

@Frank Wong Couldn't agree more on sweating the small stuff. I spent a tremendous amount of time and resources on those types of things in the beginning. What a waste of energy. 

[Anthony Wick]

Not allowing pets. I now do, and also charge more rent. 

Supplying a washer and dryer in my duplexes. This week I have changed that to not supplying them. 

I have laid down LVP previously. I still like LVP, but no way do I do the work anymore. My knees and back vetoed that idea a while back. 

[Dan H.]

Originally posted by @Anthony Gayden:

@Will Gaston

Great thread idea. 

I will say that when I started I was dead set on multi-family investing. I even looked down on single family home investing. Well I have completely changed in that aspect and have a new appreciation for single family rentals. 

The thing that I like the most about single family rentals is that it is dominated by small landlords. There is a lot of money to be made due to the inefficiencies. 

My list starts with the opposite of Anthony:
- I have been 4 units and less. I would go true MF for the scalability if starting over today. I agree I can make more per unit with SFR but scaling is tough. The cost savings from large scale is significant.
- I used to do all the handyman work myself. I now prefer to hire out as much of the work as I can but sometimes it is just easier to do the work myself (and virtually always cheaper to do it myself).
- Initially I over valued the cash flow. Today I look at total return versus the effort. I have many of my units in C class area and I continue to look there because I have a strong foundation there. However, If I were starting over I would be looking at class B area with value adds but a lower cash flow projection. A small percentage of my RE profits/net worth has been from cash flow. The value adds and the market appreciation profits pale the cash flow (this is even with a duplex that cash flows over $5K/month).

There is a decent chance that my next purchase is a commercial MF (5+ units) in an expensive and appreciating market (I have a couple I am considering) in a class B or above area that is likely to have a small amount of projected cash flow.

[Will Gaston]

@Anthony Wick I did the same on pets as well (I allow them now and get a pet fee.) Would've made life a lot easier if I would've done that all along.

[Dennis M.]

In my short time doing rentals I was gung ho on multifamily but now I realize single family can be a powerful tool as well . Going forward I’d prefer to do owner financing instead of collect rent . I want passive mail box money not tenants toilets and termites

[Matt M.]

I buy SFH and renovate myself. It takes to long which is a problem, but I cannot write $10-20k checks to have someone else do it, nor would I be able to continue to buy houses if I was paying contractors. But... if I could change that I would. But #2... since I do them myself I know they are done right and everything gets looked over and fixed and I know every nook,cranny, and potential future issue(s) about my houses.

[Anthony Wick]

@Will Gaston

New tenant signing this evening. Pet fee of $150 and pet rent of $50 per month for their Yorkie. They didn’t seem too excited about paying all that, but my duplex is very nice and I just repainted and laid fresh carpeting (I know, I know....LVP and all that. But we just bought this property and wanted to only spend $2,500 on flooring right now).

[Dante Anderson]

Quote from @Nicole Heasley Beitenman:

Seconding @Anthony Gayden. I was all about MFHs until I started running the numbers on them in my area. The price is higher and the rents are lower. I also thought 2BRs/3BAs were the ultimate choice for a rental. But my 2BRs bring in just as good returns with fewer tenants and fewer headaches. Finally, I thought I wanted to BRRRR. Now, I just look for low-cost turnkeys.

 Are you buying in Youngtown, Oh still? Any advice on finding low cost turn key properties?