All Forum Posts by: Rich S.

Great question and idea.  I'm very interested to see responses to this.  

@Paula Rinkovsky. Fiscal responsibility left the Federal Government many moons ago!  

I often wonder how much information and reading would exist on the internet if it wasn't for "theories" and "panic forecasting" types of reading.  Everyone wants to create reaction, so to do that, you have to be extreme, you can't be just informative and fact based.

In my opinion, no two corrections are the same as market conditions are always different and in real estate, regions respond differently.  Do a lot of folks believe some kind of correction is coming?  I'm sure many exist, but WHY do they want to tell you?  WHY do they want you to believe that?  It doesn't seem that we look a layer deeper very often.  Our society is much more surfaced based than it ever has been.  We want to create reaction, we want things to be constantly polarizing.

For example, say a correction is coming, where values flatten or even dip a tad, interests rates move up a bit(the irony of this is insane as the cost of money has never been cheaper) as long as you aren't terribly over extended, most REI can handle that. Sure, it will eliminate a few over extended folks, but it won't have cataclysmic affect.

I think broad statements like a crash is coming are way too subjective.  What do you consider a crash?  What kind of crash are you predicting? etc.  An investor who isn't over-leveraged and only buys immediate value buys, is most likely able to sustain, but someone who is over extended, really sticking their neck out there, is in trouble in any market, in my opinion.  

If folks feel things are about to shift, reorganize your assets and positions.  If you don't, keep doing what you are doing.  It is fascinating why folks want to try and warn everyone... example, why would an investor want to warn everybody about a "crash".... I mean if everyone tries to sell, goes liquid, the tail end of the selling, values will drop due to over supply and then when it bottoms out, values will sharply rise because so many folks have cash to try and capitalize, you create a competitive market and what has really been gained?  The human behavior piece in all of this is the most fascinating.

It's a car, you can always buy another one.  If you regret it, just buy another one or buy it back.

I think these types of things really show you an investor's thought process.  Some folks are all in on raising money, doing deals, investing everything back into the business, head down, charging full speed ahead with no room for distractions or things that take away from the business.  Others like "rewards" for their work and buy toys, spend lavishly on certain things etc.  The bottom line is there is no perfect way.  Find the balance that fits you.  If all we are doing is saving and putting the money back in without ever taking it out and only focused on more properties, more revenue, more deals, etc... what in the heck are we doing it all for???? :)  

Great conversation here.  I'm with @Bill F. that the comment below made by @Steve Vaughan is a home run:

"What kept us going was knowing we were front-loading and it would end. We knew once stabilized, the assets would perform for years to come."

It is really the crux of the conversation on a lot of threads. The really successful folks in REI in my opinion, always worry about winning the war vs. the battle. Sure, it is easier to win the war if you win more battles, but some get so concerned they are fighting battles, they forget about the war.

The best part about this thread is you got a lot of heavy hitters to respond and share their thoughts!  As a person not even in the category of anyone who posted here, I'd share this.  Why are so many people looking to get out of their jobs?- I think it is a lot of reasons.  First, data exists everywhere now to show how wages have not kept up with corporate earnings.  Many folks feel taken advantage of and unfulfilled- money isn't the only caveat though, the TIME people invest in their jobs, they start to realize they never get it back.  For many, 50 years ago, life was slower and it was more about a steady lifestyle.  Now, everyone is chasing experiences, how many things can I do with my life, time being the one thing you can't get back.  There is no doubt the glamorizing of RE Investing has driven this bus as well, too.  The reality is, never before have more people WANTED more things and never have more people feel liked they DESERVED more things.  There are plenty of adults in the world today whose parents spent almost every waking moment making sure they had all they wanted(wanted not needed!), could do everything they cared to do, etc. as children.  It has created an eternal WANT for more and more things, money, stuff, experiences.  I think folks hear podcasts, see infomercials and  think, " He or She has everything I want and they do this!"  

I also think the humility of some of the key folks on this site, also help drive the confidence bus.  Folks like @Jay Hinrichs, @Steve Vaughan, @JD Martin have had so much success, yet you never hear them discourage folks, they often talk about how it isn't about some secret process, but rather doing the work, being mindful, seeing things through. I think most folks feel they can do that, so REI becomes more appealing.

REI for me is an avenue to financial security, but I know full well, I can't "sit and drink appletinis" all day. I'm not wired for that, however if REI can give me more power of choice, I'm all for it. I also like tangible. Real Estate is a physical thing, not just some stock or bond or whatever. I can see it, work on it, watch what it provides for others. I can physically see it provides a home, jobs, a contribution to the community, etc. Yes a stock may do that too, but I can't see it.

Disclaimer- I'm not a wholesaler or a realtor.  I do find it interesting that if a wholesaler gets a property under contract and doesn't purchase it or get it sold, whatever you want to call it, he/she is a bad wholesaler with poor intentions.  However, when a realtor signs up to list a property that doesn't sell, it is a problem with the property, bad market, owner wants too much type of deal.  Also, a wholesaler "steals equity" at the beginning because he/she is not being forth right with a homeowner, when everyday houses sell through realtors for less than they should- not because anyone is trying to pull a fast one, but because a listing has gone stale, a contract is about to expire, seller is fatigued, etc.  The irony is one is "widely accepted" while the other is "negatively categorized."  The bottom line for both in my world, is there are good and bad in both worlds.  In my opinion, yes a realtor has more safeguards in place and usually has more protections for themselves and their business, but in a market like we have now in many places there are lots of brokers just signing agents in hopes of capturing more volume and from what I see, offering much less quality service than in a normal or slow market.

I guess part of the way I view them, without a very established relationship- the wholesaler is the yard sale, craigslist listing or facebook marketplace item.  Often a more attractive price for a good, but comes with a bit more risk.  A realtor is like the box store, where you get a receipt, have the protections to return, get service on an item, etc.  In my world one offers more security than the other, but doesn't always leave the most meat on the bone.  The reality is, both have a place in the marketplace and collide when trying to serve the same niche.

This is a good thread... as a newbie and very limited experienced REI, I feel the following:

*Where can you get free access to thoughts, models, experience and back and forth conversation from so many accomplished folks from all over the world for FREE in any industry like you can here?

*The thought process of "I'm getting nothing from this anymore" is a perfect summary of our society as we are right now.  If we aren't getting something for it, immediately, we don't seem very engaged (as an average, not everyone)

*I think everyone is looking for different things here, maybe just slightly different, but this thread is a perfect example of that.  Some are looking for information to get started, some are looking for analytics about the industry, some are keeping up with buddies/respected colleagues, etc.  Maybe the folks that don't see the value, aren't finding what they want anymore or don't NEED what they were looking for anymore.

BP is about as good of a site for this type of thing as anywhere.  It provides you information from every angle and every level of person in real estate.  Just like anything else, it is up the the consumer of the information to decide what to do with it.  If it is truly becoming the village elder, like has been mentioned, maybe the key for the folks bored with it, is to start seeing their place as the "information giver" instead of the "information gatherer."

I think it comes down to your risk tolerance.  The folks that choose to leverage are "hopefully" not up at night worried about this or that.  The folks that "would" be up at night, should pay down all the debt first.  I think the biggest piece of the puzzle is to identify which category you fall in.  If in the worry category, pay it off, if not, leverage it.  The rates being low and your wife being happy may be the most important.  I think the biggest mistake you can make is NOT doing either and never getting off the ground.  Good luck.

I'm still trying to figure out why the original poster even posted his question/thoughts if he just wanted to tear apart everyone's answer.  This is a GREAT forum, because folks willingly share information that it would take hundreds of years, properties and experiences to get... we get it all in one place for FREE.  If you don't like someone's advice, just ignore it.  It takes a LOT less energy to be respectful than it does to be rude.