I do not feel this thread has been hijacked, and I really enjoy, and respect, David's opinion and experience.
This is what I feel people are missing: All sides here are correct to some extent.
Real estate has so many different roads a person can travel. What other business can you make money regardless of market conditions, with/without money, and have so much fun doing it!
I agree with both sides, as it depends on your goals. I stand behind my bullet points, and I want to repeat it.
- Speculating & Flipping gets you RICH!
- Buying & Holding gets you WEALTHY!
I feel that you guys are arguing apples and oranges. Let me explain:
Getting rich is all about the cash, making money quickly, and moving fast. The best ways to accomplish this is by flipping, wholesaling, ect. It is speculative, and risky, but is the most liquid way to do business if done correctly. You can make a lot, and lose a lot too!
Getting wealthy means getting to the point to where the money works for you, equity is being built, and it is a much slower, and less liquid form of investing. The buy and hold strategy for example, as well as building a business that runs itself.
I see part of David's argument actually agreeing with the buy and hold concept, he is just investing in his business, instead of a large portfolio. Again, a different path, but leading to the same destination of freedom.
So you have two main real estate strategies, a sprint, and a marathon.
Buy and Hold is a great way to generate long term wealth with minimal effort. There are pitfalls, tenants do not always cooperate, contractors and managers do not always do their job, and it is never pleasant to argue over who broke a window and who is going to pay for it. LOL However, if done correctly, you have an asset building wealth, paying for itself, and are not as affected by up and down market conditions. You are building long term wealth and do not need real estate to become your life.
A quick note: As far as the power of leverage goes, it is awesome, but there is a problem. Too many people get greedy in the up cycle, and go bankrupt in the down cycle. YOUR INVESTMENTS ARE NOT ATM MACHINES! LOL You can not escape greed, it is in all of us, the key is to CONTROL it.
Now, if you are a flipper/wholesaler, it is a constant struggle to find houses, find buyers, and you are open to the flow of the markets. You can make money quickly, but nothing is guaranteed. Great risk = Great Reward, but it can also bankrupt you if caution is not used.
If you have a "day job" this strategy is very difficult. It takes a LOT of education, and a LOT of experience to do it right. You must run this as a business, and it is not a hobby.
So look guys, you are all right in one way or another. That is what makes real estate investing so great!!!! We are all heading for the same goal, but the beautiful thing is that we do not need to all be on the same crowded roads to get there!
People usually succeed on the road less traveled anyway! :)
Have a Profitable Day Everyone!
- Harrison
