Real Estate Conversation From Inside the Trenches

Last night I talked shop about real estate properties with a business colleague. We’ve worked together on some houses in the past and he’s very knowledgable both in real estate training courses and in actual real world experience.

And most of it is not what the real estate gurus would have you believe.

It takes much more dedication and persistence than the real estate gurus tell you it does. I’m not going to say it’s hard at least it’s not hard to understand.

THe tough part for the majority of people is remaining persistent pushing through all the no’s to get to those yes deals which are highly profitable and make or break your business.

It was a very revealing conversation about the overall state of the economy as well as the more micro state of the real estate economy.

He recounted a tale of one of the properties he’s had for about 16 months.

You’ve probably heard (or been part of) a similar tale where you buy a property for a fast fix up and it turns into the nightmare on elm street.

You’ve probably seen this type of rehab projects on the A&E TV show Flip This House and there’s another show called Flip That House.

It was supposed to be a quick fix and turnaround deal…in and out. But it turned into 6 months of hell.

After real estate negotiation, financing, and bringing in a partner he was able to get the property fixed up in what turned out to be a six-month process and the original budget of $40,000 mushroomed out of control into a completion budget of $62,000.

So as you can see both the time estimate and cost to repair budget were way way off. And not in a conservative way.

This has definitely been a super frustrating property for him as evidenced by him talking about various details of the project to me for roughly 35 minutes.

I could sense the pain in his voice.

Tough as it was for me to hear and I’m sure for him to say it was a good thing. It forced him to reevaluate the strategy he was using in this current market.

The biggest problem are the false expectations setup by what you see on TV…and mainly what they don’t show you on TV

It’s easy when you’ve been in the business for years and have reliable construction workers, but most people don’t. And if you just hire a general contractor most of the time his fees are too high to make it profitable for you.

He’s moving into the tried and true, buy it for a small discount and hold it as rental appreciation strategy.

Regular people like you and me have been getting wealthy with this buy-and-hold real estate strategy almost since the beginning of time. Robert Kyosaki would call it the get rich slow method.

Even though it’s slow isn’t it worth it to you to become wealthy?