“Do It Yourself” Real Estate Investing — How’s That Been Workin’ For Ya?

Posted @ 9:31 pm - Filed under Investment Lessons, Real Estate Investing, Sez Me

Don’t wish to sound trite, but it hurts my heart when I speak with folks calling to explore their options, and at least half of what they’ve done in the last 5-10 years or so would’ve been diametrically opposed to the advice I would’ve offered. Worse is when they’ve stood pat, when they had incredibly solid options for action on their menu. The story usually starts with how they spent so much time and money ‘learning the ropes’ at how-to seminars. How to make a million without breakin’ a sweat. How to become the flip and/or rehab champ. How to…well, you get the idea, right?

What they learned in fact is that they could study what an expert does for six months and not know what the expert’s forgotten. That may sound somewhat harsh, but step back a bit and ponder what an expert is. Not what our culture has done to discount the concept of elite expertise, but what our Grandpas told us. An expert is an authority on a subject or group of related subjects. An expert’s knowledge can be correctly described as comprehensive. Along with the comprehensive knowledge and authority comes experience.

So when we hear ad nauseam about all these so-called self taught ‘experts’ in areas of expertise common sense tells us hasta take longer than a few seminars, studying some notes, and applying various ’secret formulas’ for success? Go with your gut. There’s simply far too much to know, much less understand when it comes to investing in real estate. All these do-it-yourselfers, especially the ones who started out with the wind of luck fillin’ their sails, are now dead in the water — and don’t know why.

Look, experts can’t predict the future — I are one, so I can tell ya that without blinkin’. Our crystal balls are just as worthless as the next guy’s. Nobody could’ve predicted our current set of circumstances, though we still try vainly to do so at times.

Taking all that into account, expert advice simply cannot be duplicated by do-it-yourselfers. Let me amend that ever so slightly. I’ve met, in my four decades in this business a handful of do-it-yourselfers who were exceptions to the rule. 4-5 over a period of a couple generations ain’t impressive. The rest of the breed ends up in various forms of train wrecks, almost always with that ambushed, ‘what happened?’ feeling. Sometimes it happens immediately, sometimes it takes years, but eventually they’re like the guy driving way to fast in a thick fog — it’s just a matter of time before the inevitable happens.

Boom!! Party’s over.

As I said at the start, it hurts talkin’ with good folk who’re in tough situations even though they’d ‘done their homework’, ‘research’, and as one very astute, successful investor recently told me, ’sniffed the dirt’. (Hadn’t heard that one since my oldest mentor passed away a couple years ago.) Unlike the very experienced investor who said that, these poor souls went off the tracks thinkin’ all was clear cuz they had a false sense of ‘all clear ahead’.

Why?

That’s the sad part. They were, with rare exception, convinced they’d acquired the knowledge required to make superior, informed decisions — they’d declared themselves experts. When in fact, if you’ll allow a baseball analogy, they were great high school baseball players going up against seasoned pros. The outcome was known before the first pitch was thrown.

Do yourself and me a favor. Keep learning, but pretty please with sugar on top, stop thinkin’ your do-it-yourself approach is gettin’ it done for ya. It’s getting something done, just not what was possible. In the long run your outcome is almost certainly predestined — and it ain’t gonna be pretty. Understand the depth of your dilemma. It’s not the answers you don’t have — it’s the answers to the questions you have know clue to even ask that will ultimately derail your real estate investment train.

Thanks for allowing me to vent. Do-it-yourself types have the right idea, but learn far too late there’s a difference between understanding a few complex concepts and actually being an experienced expert. The only kinda train wreck I’ve ever seen is ugly.

Let’s get your train back on the tracks. If that sounds like a good idea, give me a buzz at 619 889-7100. Have a good one.

This entry was posted on Monday, June 29th, 2009 at 9:31 pm and is filed under Investment Lessons, Real Estate Investing, Sez Me. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.