Investor · Midlothian, VA · Member since 2015 · 305 posts · 199 votes
I am seeing a lot of people jump in and out of the market. Why do you think that is? There have always been a lot of "part time" investors; people who do deals now and again. Maybe a flip a year? One or two wholesale properties every 6-10 months? Do you think it is because people are too scared to make the jump? Or are they not finding the success they want? Perhaps they find it too challenging but at the same time, they don't want to totally give up? I would like to see the people in the business be more committed and full time. I think it would raise the professionalism level in the industry. Thoughts?
1. I think people jump in & out because it is difficult to develop systems for each component of the job and follow them. I am lucky because I have an acquisitions manager that has a background in systems development, he basically trailed me around for a year and synthesized everything we do into a few spreadsheets and check lists. Having the ability to effectively intern for a whole year says a lot about where both us are financially, so in sum there is a lot to the job, tools are not readily available and lastly you need to be financially stable in order to do it full time. The last part is particularly challenging because it means you need to make enough money where you just go out and do something that you are not being paid for. You also need to have enough money to support yourself and lastly you need to have additional money to fund your new business activities.
2. It is reasonably easy to do 1 or 2 deals per year on the side; the real challenge is to buy at least one house per month. So, again I think the level of commitment increases exponentially when you try to scale beyond 1 or 2 deals per year.
3. I agree, it would be great if more investors either went full time or exited the industry. I think this outcome is unlikely, television, radio and many other avenues encourage every day folks to become 'investors', and they make flipping houses look easy or cool. The media pieces rarely show the difficulty associated with the business, choosing instead to always add the standard 'we broke a wall & found this...' segment to their pieces.
Lastly, I believe professionals benefit from an industry where barriers to entry are low and market participants are able to step in & out easily.
Hey Scott I think your view of what a real estate investor is supposed to look like is very narrow. I fell like now with information shared so easily its very easy for someone to look into the world of real estate investing, check it out and then step out just as fast as they arrived.
I believe there are those who are just window shopping. They sit behind the keyboard and play virtually real estate investor everyday like a video game. They never win and they never lose, but none the less very entertained by the idea of being an investor.
Then there are professional real estate investors. These people dedicate their life to the profession. They make their living from their profession. They uphold all of the ideals that you seem to be looking for in a REI.
I believe your view is too idealistic. I don't believe there is any perfect profession or industry out there. You just need to find the people in your industry that make you money and that are up to your standards.
Flipping houses is easy right? HAHAHA. TV has played an impact on that aspect of the business. You are right about having to have money to sustain a full time gig. Real Estate is a great way to build wealth but a hard way to make a living. At least at first.