If you could go back in time..

[Eugene Rabinovich]

If you could go back in time, to the start of your investment journey, what would you tell your younger self?  Anything that you wish you would have known when you first got into real estate? 

[Jason E. Smith]

Eugene,

I think your question has a deeper meaning than you even realize right now. As you progress in your investments, you’ll find that time is much more valuable than money and your question is focused on compressing time.

I began real estate investing in 2005, which was the perfect time not to begin real estate investing. The atmosphere was very similar to today; risk on approach, frothy real estate market everywhere, lots of money chasing few deals in real estate, low number of days on market, record prices, etc. At that time I was focused on flipping single family homes in Winston Salem in order to build up cash to invest in cash flow properties to exit the rat race. At that time I knew nothing about macro economics, the FED balance sheet, the DOW to gold ratio, NHI, Mueller's market cycle, etc. I was strictly focused on Winston Salem real estate and not one moment of any of my weeks did I spend any time considering macro economic forces. When the financial crisis hit, it was a surprise to me. I watched about thirty to forty thousand dollars of paper equity erode in a few months. I had a few houses I didn’t want, but I couldn’t sell them at break even and I didn’t have the liquidity to cover the losses selling them. So I rented them out to keep my head above water. I remember about 2008 watching an interview with J Kyle Bass and him explaining how he saw the crash coming, tried to warn people and at that time his investors were up 1,800% while I was barely keeping my head above water. In that moment I knew I was on the wrong side of that trade and I didn’t want to repeat that mistake. Since then I’ve learned about market cycles and the importance of being early. I recommend two books; 1) Mastering the Market Cycle by Howard Marks and 2) Economics in one lesson by Henry Hazlitt.

In 2018 I sold the real estate I had left feeling like we were very near the top. Clearly today we can all agree I was early, I’m confident I’m not wrong, just early. My liquidity in 2018 went into the precious metals market. It’s very much a contrarian investment to US equities and real estate.

So in summary, if I could go back to the start of my investment journey, I would take two steps back and learn macro economics and market cycles. I would also find a mentor who was where I wanted to be in thirty years and find a way to add value to their life in exchange for them helping compress time. I hope that helps.

I think your question is very relevant and I think it should get more attention than my one little reply. I’m going to tag a few people here in hopes to create better dialogue. Hope you have a great week ahead and best of luck in your investing endeavors Eugene! God Bless!

@Paul Moore @Robert Ellis @Kevin Stringari @Dan Handford @Ellie Perlman @Vinney Chopra @Vinay Kolluru @Curtis Waters @Ben Leybovich