Posted by Justin-IL on December 08, 1999 at 14:33:28:
Great post Tim, thanks for sharing!
Take care,
Justin Lee
Lessons Learned During Rookie Season…(long) - Posted by Tim Randle
Posted by Tim Randle on December 08, 1999 at 13:29:34:
I found this site about a year ago when I decided to get serious about getting active with REI. It has been and continues to be my favorite resource. I thought my comments might benefit others just starting out and perhaps the more experienced might chuckle.
This list is by no means comprehensive and is not intended to serve as advice. I’m learning as I go and this is merely a reflection of my experiences. Please do not try this at home or with anyone else’s home for that matter!
- Listening to tapes daily in my car does not make me money
- Most retail buyers cannot visualize new paint and carpet
- Landscaping/curb appeal does make a huge difference
- 150k houses in which someone has been shot to death don’t move quickly regardless of price
- Online auctions don’t work
- What works for me may not work for someone else, and vice versa
- Any type of marketing I do works, as long as I do it and follow up
- Posts on this site by any of the following must always be read regardless of content (Alcorn, Piper, Garcia, Eric C, Couch, Cook, Gatten, Bronchick, Branstetter, Rob-FL, Alexander, and all the others I’m forgetting)
- Screw condos, especially those with gated access
- Combo lockboxes are great for worker access, not so great for prospects, if I actually want to lease or sell the place
- I was warned about many of my lessons in the courses I have, but didn’t hear them until the second time through
- I have enough knowledge to talk a seller’s assets off and consequently lose the deal, yet I know nothing
- The search feature on this site is like God - you can’t sense it in any tangible way, you just have to have faith it exists
- I can’t always correct my own spelling, much less everyone else’s
- Listen to those who rant about cash flow, equity don’t mean squat (especially in Texas)
- I can’t make my spouse as excited about REI as I am
- Lonnie’s books must be really good (on my Christmas list)
- Did I mention screw condos?
- Gatten and Alcorn should individually write “The Chronicles of a Real Estate Investor” - it would be a NY Times Bestseller, and/or they could invent a video game with little Pacmen chasing woodchucks around
- Property Management Companies are useless
- I’m going to have to learn the paper business if I want to be good at REI
- Many, many people talk, most don’t walk it
- I don’t want to do PBJ’s and Kraft Macaroni and Cheese again (sorry, Rob, and I agree to keep my J.O.B. until I’m ready, too)
- I’ve got to get more organized so I don’t have to scramble with each deal
- Don’t spend money on a house I don’t own
- Peculiar, but a seller will always take a L/O over a subject to, if I’m stupid enough to present one against the other
- Realtors don’t like to be screened by an answering service
- I’ll probably never fully implement everything I already know, yet I know nothing
- There’s no right way to do REI, just my way which continually evolves
- I have to buy at an absolute maximum of 80% of value regardless of my exit strategy if I want to allow room for my errors
- If I buy “right”, I can screw up left and right and still make a chunk of money
- Access to Lines of Credit starting out made me weak
- I know what walking on an 11" differential in the slab means now
- There are only two possible outcomes, success or quitting
Anyway, that’s my list for now. What will year 2 bring? I’m looking forward to putting faces with the names in Atlanta. Thanks to all of you for all you have contributed to my education.
Re: Lessons Learned During Rookie Season…(long) - Posted by Ron in KS
Posted by Ron in KS on December 09, 1999 at 21:57:54:
Great post, Tim.
I’ve read everyone’s comments for sometime, but haven’t ever responded. Your thoughts, however are too dynamic to ignore.
#1: I have all those tapes too, and drive around listening to them. They DO help, me at least; but there’s a time one needs to stop sharpening their axe and go into the forest and use it.
#2, Agree! I force myself to NOT show a place for rent until it’s finished. It’s difficult to pass up a prospect who see’s work being done, but either they can’t see what’s in my mind’s eye, or my mind’s eye is terribly blurred as a I wave my arms and tell them what it’s GOING to look like. Wait. Don’t show it. They won’t understand your vision!
Others: I agree, mostly.
#30: My goal is that as well. To buy at 80% or less of FMV/LTV. With this formula, not only do I avoid the dreaded PMI but it allows me to make the mistakes I know I’ll unfortunately make. Those who say they can anticpate and identify all rehab problems are unrealistic.
We need to continually reinforce this 80% factor and undercut it when we can. Or, we’ll simply not make any money. Even with professional inspections (that I seldom do) there WILL be surprises when one gets into rehab or even flipping for immediate resale.
#32: Hits home. I started REI with a good J.O.B and have the Lines of Credit you refer to. So, I don’t need to be as inventive as Sheets (and most everyone on this site) say you can be. Is a major problem in leaving the R.U.T. (I mean the JOB!). I’m not sure that I may be able to do it creatively without my Lines. So, I’ve stayed employed which has slowed down my investing a GREAT deal. I lack the experience to do it without a job and am fearful of being “unemployed” as I approach lenders.
I need to learn to approach the sellers, not solely the lender. I’m “weak” as you correctly stated. Reading more on this site is very helpful in working on this weakness. The weakness a strong force, however. It’s preservation in the sense that I was taught and is hard to overcome!
#33: We’ll, I’ve been around the block and know some of our industry jargon, but the 11th slab has me stumpted like some of our other readers. Huh?
#34: Finally this one. Well, that’s the secret to life, not just REI. Quitters don’t win and winners don’t quit - blah, blah, blah. But, as trite as it is, it’s the truth. If you’re self employed in any area, or even work for Mary Kay (I wish they could give me a pink vette, I go sell blush (well, maybe not)).
Nevertheless, Tim you hit the real key to success in whatever one does. It’s particularily important in REI due to the occasional downturns (or expenses that are unexpected that SHOULD be expected) that we all experience. If you have a real job, those things aren’t noticeable to you, but they are to your employer and you may be immediately let go for the same reasons. So, plan ahead friends.
Sometime back I read another trite quote that helped me because I believed it: “Dig your well before you’re thirsty.” I wish I could credit the author - maybe someone else can. It’s helped me for a long time to get started.
Thanks again, Tim, for listing your thoughts. You’re on target and it’s good to remind us all of what’s important. It’s equally important that we continue sharing our experiences and input with one another.
Gawd…this is even longer than your’s. Sorry!
Your friend in investing. cheers. Ron
(P.S. Can’t find spell check on my Mac with this site so I’m sure I’ve littered the field with typos. Sorry.)
A good corollary for #31 - Posted by DaveD(WI)
Posted by DaveD(WI) on December 09, 1999 at 13:51:09:
If you buy “wrong”, it doesn’t matter how subsequently brilliant you are, you’ll still probably lose money (or at best have a very skinny payday).
I try to keep that in mind when I’m staring at a marginal deal. There’s no shortage of them, either.
Great post, Tim!
-Dave
The Most Important Lesson of All… - Posted by JPiper
Posted by JPiper on December 08, 1999 at 21:49:18:
You will forget all of this*
JPiper
Excellent Post - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on December 08, 1999 at 19:12:25:
Tim,
My courses remind me about many of your points as well. After reading your post, I’ve now read many of these things TWICE as well. Hopefully, that’s all it will take for me to learn the lessons! Experience is the best teacher, but she can be a very expensive one.
Thanks for writing such a great post.
Bill K. (AZ)
Good job, Tim…I’m right there with ya!! (nt) - Posted by steph in tex
Posted by steph in tex on December 08, 1999 at 17:20:13:
see ya next wednesday.
glad to hear you’ll be at the convention.
steph
Re: Lessons Learned During Rookie Season…(long) - Posted by kip
Posted by kip on December 08, 1999 at 14:47:59:
Thanks for taking the time to jot these comments down. I can relate to many of these even though I have only been lurking for the last few months and have not yet made a deal. I can espically identify with 1, 6, 7, 16 and 24. I learn something from 90% of the posts on this great site and look forward to sharing my first sucess. BTW, what is the meaning of “…walking on an 11” differential in the slab…?" Do I have to find out for myself?
Frank Kip