The Biggest Mistakes New Real Estate Investors Make

  • Share:

This Money Monday we will discuss the biggest mistakes new real estate investors make!

VIDEO TRANSCRIPTION

00:00
now so money mondays monday monday
00:02
monday
00:03
monday mondays right every monday at
00:05
what time
00:06
3 30 central ooh speaking of money
00:10
monday monday monday everybody kevin
00:12
i mean they were texting about golf and
00:13
he randomly signed me up to get
00:15
what is it to get advice to get
00:17
registered for lessons i should get
00:18
registered for lessons because i don’t
00:19
know anything about golf but didn’t mean
00:21
to get sidetracked
00:22
all right all right well hey you know
00:24
nothing better than a monday well i
00:25
figured i’d like to
00:26
be in real estate without knowing how to
00:28
play golf but for those that know me
00:29
have you ever played before
00:31
yeah topgolf okay played several times
00:34
now
00:34
that’s about it never been on the green
00:35
i’ve been to a driving range twice
00:38
and might as well have never been we’ll
00:40
get you out there buddy we’ll get you
00:41
out there i actually like playing golf
00:43
it’s just one of those things
00:44
i haven’t been able to do for a while
00:45
thanks covid so
00:47
yeah but we’re talking real estate today
00:49
man so what are we talking about
00:50
we are talking about the biggest
00:51
mistakes new real estate investors make
00:54
oh and there are a lot of mistakes and i
00:56
like we can talk about this for like an
00:58
hour
00:58
yeah i don’t like to tell people it’s
00:59
okay to make mistakes it’s about making
01:01
mistakes that aren’t going to kill you
01:03
well the two that and i’d say the other
01:05
piece of advice is
01:06
everybody’s going to make a mistake
01:07
right it’s that you learn from it and
01:08
you don’t make that same mistake again
01:10
yeah right because there’s always going
01:12
to be things challenges things that you
01:14
overlooked or didn’t realize were going
01:16
to happen and the mistake that ben
01:17
always makes
01:18
is not learning from his previous
01:19
mistakes so you should learn
01:21
to learn from his mistake of a previous
01:23
mistake all right going to leave it
01:26
all right we’re going to get into this
01:27
folks because there’s there’s plenty of
01:28
these to go around
01:29
and once again we want this to be
01:30
interactive so for people that are
01:32
tuning in
01:33
facebook linkedin instagram drop a
01:35
comment in there
01:36
let us know some of the mistakes that
01:37
maybe you you’ve heard of you’ve done if
01:40
you want to be
01:40
you know transparent about the whole
01:42
thing um i’ll probably try sprinkling a
01:44
story or two about some of the steaks
01:46
that i’ve done um so all right
01:48
the biggest ones right so i always love
01:51
this one this one’s
01:52
this one’s also kind of coming and you
01:54
know it’s rearing its ugly head this
01:55
last six to twelve months since cobia
01:56
popped up it’s
01:58
is this the right time to invest right
02:00
there’s never going to be a perfect time
02:02
right if i knew the perfect time i would
02:04
time the market every single time
02:05
perfectly
02:06
and i probably wouldn’t be on the show
02:07
because i’d be a billionaire living on
02:09
my own island
02:09
and actually i would say while real
02:11
estate is cyclical
02:13
yes it’s actually still similar to stock
02:16
market
02:16
and this is what time in the market is
02:19
better than
02:20
timing the market ooh i like that did
02:22
you make that up yeah i made that up i’m
02:23
a g no
02:24
that’s a very famous phrase and that’s
02:25
very true right because you know the
02:27
assumption
02:27
with stocks right is stock markets
02:29
continuing to rise and you know yes
02:31
there’s dips and falls and it crashes
02:33
but you know the mar in general the
02:35
economy grows right and one thing that
02:37
warren buffett even pointed out or maybe
02:39
it was one of the
02:40
where if you kept your money in the
02:41
market even during eight nine and ten
02:43
right
02:44
you know you’re ultimately going to make
02:45
more money than if you top you tried to
02:47
top the market out and then sell
02:49
right and then buy on the dip it just
02:51
doesn’t work like that right nobody can
02:52
perfectly time it
02:53
so just keeping keeping yourself in the
02:55
game is probably the best thing you can
02:57
do you all heard it here first so i’m
02:58
sure in about a month from now ben’s
03:00
going to be using this phrase
03:01
every other chance but no so the real
03:03
estate though
03:04
i like to say it’s actually more
03:05
powerful because with real estate
03:07
the thing you get with timing is it pays
03:09
down the note over time
03:10
yes so i mean that’s that itself fixes
03:12
itself right i mean well plus
03:14
any deal could work if i could do it
03:15
long enough right even if i buy a deal
03:17
and it just doesn’t cash flow let’s say
03:18
zero breaks even every single month
03:20
guess what if i hold on to it until that
03:22
loan gets fully paid off i now own that
03:23
asset free and clear
03:24
so even though i didn’t make any money i
03:26
still made money right it fixes itself
03:28
and so
03:28
you know it’s an important thing to
03:30
realize i think with people no i agree
03:32
100
03:33
right you know so don’t don’t just try
03:34
to time it like oh is 2021 the right
03:37
time to hop in the game right
03:38
people people literally said that there
03:40
was a top in the market
03:41
since i started investing in
03:42
multi-family in 2015. they’re just like
03:45
oh cap rates you know i’ve never seen an
03:47
egg cap before i’ve never seen a seven
03:49
cap like that was the
03:50
craziest thing and now cap rates are
03:52
four five and six right
03:54
you know and and you know the market you
03:56
know still hasn’t really tanked i mean
03:58
obviously it was a rough rough year for
04:00
multi-family i’d say in 2020
04:02
but that’s what that was we ultimately
04:04
fared better than a lot of the other
04:06
asset classes
04:06
and you know real estate is different in
04:08
different markets so yeah
04:10
meaning it might be down in one place
04:11
but guess what there’s somewhere that it
04:13
makes sense to buy
04:14
so don’t feel like you’re just going to
04:15
always sit on the sideline if you don’t
04:17
think that market that you’re looking at
04:18
is a great place to buy
04:19
don’t just sit around and say i’m going
04:21
to wait another two years go find
04:22
another market there’s a
04:23
millions of markets out there yeah right
04:25
so again don’t get caught up in just
04:27
sitting that’s actually a good that’s a
04:28
good that’s a good mistake that people i
04:29
think make right
04:30
is they’re waiting for the perfect
04:32
opportunity in their backyard right
04:33
and they need to realize that that might
04:35
not ever come right we didn’t look in
04:36
houston for quite some time because it
04:38
just wasn’t the right timing right
04:39
you know and now we’re starting to look
04:41
there but there’s some other more
04:42
macroeconomic things that are happening
04:44
here and that’s the reason why we’re now
04:45
looking in houston
04:46
so i mean we went to other places like
04:48
san antonio like atlanta
04:50
right you know i mean you have to you
04:51
have to kind of sometimes look outside
04:52
your backyard
04:53
and i think a lot of people make that
04:54
same mistake oh i want to be able to get
04:56
over there and
04:58
you know show my wife or show my husband
05:00
or show my kids you know blah blah blah
05:02
that’s all great and fine but it might
05:04
just take you a lot longer to find a
05:05
deal
05:05
right so that’s why a lot of people in
05:08
california invest in texas
05:09
absolutely but they still live in
05:10
california yeah anyway
05:12
all right so that’s probably one of the
05:13
bigger mistakes yeah so
05:15
before we keep going monday monday
05:17
there’s every monday 3 30 central
05:19
right basically spend about 15 20
05:20
minutes talking about different topics
05:22
this week we’re talking about the
05:23
biggest mistake new real estate
05:24
investors make
05:25
we’ll spend the last 10 minutes 15
05:26
minutes talking about q a so if you have
05:28
comments questions go ahead and leave a
05:30
comment and we will answer them live
05:31
ronnie says what’s up what’s up ronnie
05:33
ronnie ronnie ronnie what’s up buddy
05:35
ronnie is the clubhouse king i heard so
05:37
no i heard he is kingpin
05:39
kingpin a clubhouse oh no no you got the
05:41
show i want to show i need an iphone i
05:42
need an iphone yeah when i see it a
05:43
couple days man i want to see i want to
05:45
see what this thing’s all about i’ve
05:45
never even been on there i got a i got
05:47
an android
05:48
right yeah a slacker dude i’m a slacker
05:50
but let’s keep going all right so number
05:52
two
05:52
analysis paralysis what does that mean
05:55
ben what does that mean
05:56
and i see this this is probably one of
05:58
the things this is really really popular
06:00
and it’s and it’s and it’s and it’s so
06:02
frustrating for me because i just wanted
06:03
to shake people
06:04
right they get so caught up in the what
06:06
if that they never actually pull the
06:08
trigger right
06:09
they’re oh what if rents don’t go up by
06:12
four percent they go up by two if they
06:14
go up by two then my deal is not going
06:16
to work right there
06:17
they pick apart their own deals and
06:19
their own analysis
06:20
and they ultimately compound the problem
06:22
right they’re going to say oh well
06:24
you know vacancy is going to go up and
06:26
you know my rents are going to go down
06:28
and my reversion
06:29
cap rate’s going to go up all of these
06:31
bad things that never happen
06:33
in in conjunction with each other right
06:35
you know
06:36
ultimately are going to blow up any deal
06:38
but that’s how they usually pick their
06:39
own deals apart they’re so caught up in
06:41
their head and what could potentially go
06:42
wrong
06:43
they talk themselves out of every single
06:44
deal yep right and i can i can literally
06:47
judge somebody within
06:48
two minutes of talking to them if
06:49
they’re going to be a tire kicker and
06:51
i’m not saying that everybody that has
06:52
analysis paralysis is a tire kicker
06:54
right or if they’re actually going to
06:56
take action and go out and make things
06:57
happen right once again you’re not going
06:59
to know all the variables
07:00
you will make mistakes there is risks
07:03
it’s just about
07:04
not you gotta mitigate you’re not
07:05
killing yourself yeah that’s where
07:06
partners come in that’s where go
07:08
and get educated listen to podcasts go
07:10
sign up for training whatever it is that
07:11
makes sense for you
07:12
but know enough right but not no you
07:15
know
07:16
don’t know too little to just get killed
07:18
right and so
07:19
yeah i’ll go with that one ben’s gonna
07:21
use that one in about a month as well
07:23
six weeks on that one but no it’s the
07:25
truth of it right get out there
07:26
and learn you know like i’m a big person
07:28
of just listen to podcasts read a lot of
07:30
books
07:31
know enough of how things work find a
07:33
person or two to kind of help you and
07:34
go out there and get things done you
07:36
will make mistakes you will have less
07:38
capital than you may need
07:39
you will overpay a vendor you will hate
07:41
i mean all these
07:45
you know knowing okay i may overpay for
07:47
property how do i mitigate killing
07:48
myself well
07:49
go with less leverage right that’s an
07:50
easy way if i go very low leverage i’ll
07:52
never not be able to pay the note
07:54
that’s an easy one right now that’ll
07:56
impact your returns but again
07:57
it’s okay to make less returns it’s not
07:59
okay to get killed yeah you know it’s
08:01
all about mitigating that risk right
08:02
there’s always
08:03
inherent risk in what we do and those
08:05
that analysis paralysis for people that
08:06
don’t really
08:07
that that is people are just crippled by
08:10
what
08:11
could go wrong right instead of actually
08:12
taking action right so i always thought
08:14
fi or ready fire aim right and what is
08:17
that it’s a tony robbins-esque
08:18
quote and that means just get into the
08:20
game you can adjust and figure it out
08:22
along the way but you’ve got to take
08:24
action you have to have some forward
08:25
momentum
08:26
and momentum in this game is one of the
08:28
most important things right
08:30
so analysis paralysis you never get
08:32
started you’re never going to get
08:33
anywhere
08:33
rushing into a deal without completing
08:35
thorough due diligence so there’s a
08:36
there’s a balancing act right
08:38
you don’t want to be you don’t want to
08:39
be hamstrung by not doing
08:41
uh by analyzing the hell out of the deal
08:43
and not doing anything
08:45
but you also don’t want to be you know
08:47
um well let’s just
08:48
you know under or not underwrite
08:49
anything and just throw lob offers in
08:51
there whatever happens right
08:53
there has to be a happy medium there
08:54
right and some people will not do enough
08:56
due diligence
08:57
or thorough due diligence and they’re
08:58
just lobbing offers in there and hoping
09:00
for the best and ultimately they’re
09:02
gonna get burned right
09:03
you know so that’s a big mistake that we
09:04
see right you know
09:06
playing the short-term game right you
09:08
know kicking tires i think you know
09:10
um there’s a lot of people that just
09:12
kind of you know they
09:13
you know maybe do this um you know let’s
09:16
throw an offer in once a month right
09:17
you know at the end of the day you know
09:19
you’re not committing
09:20
to doing anything you’re just kind of
09:22
nibbling around the edges you’re just
09:23
kicking tires right you have to commit
09:24
to this business
09:25
in order to have enough deal flow and
09:27
enough offers going in to actually win
09:28
something
09:29
right you know you’re looking at 100
09:31
deals to find one that you’re going to
09:32
probably
09:32
close yeah so and realizing that and
09:35
again put a plan in place right
09:37
it’s not a passive thing and if you want
09:39
to be a passive investor great if you
09:40
want to be an active investor which i
09:42
think a lot of the people that are
09:43
watching this probably are
09:44
it’s not a it’s not a very passive thing
09:46
and so it’s about getting out there
09:48
talking to brokers making offers
09:50
finding out what you like and what i
09:52
don’t like figure out what the match is
09:53
and it’s just
09:54
kicking tires i think a lot of people
09:56
find it attractive to say hey i’m going
09:58
to buy an apartment company
09:59
yeah you know it’s a status symbol or
10:01
one yeah but really it’s
10:02
more about getting out there putting a
10:05
plan in place and just executing right
10:07
and you know this is where you put goals
10:08
hey i’m gonna i’m gonna underwrite 20
10:10
deals every week
10:11
period even if i can’t find a deal i’m
10:12
gonna go out and find a deal right
10:14
that’s a goal
10:14
now maybe you do that for a while and
10:16
you realize you’re not getting anything
10:17
because you’re not submitting offers
10:18
well then you readjust your goals right
10:20
but it’s not a short-term game it really
10:22
isn’t right don’t be a guitar kicker
10:24
keep kind of getting out there and
10:26
taking proactive steps to
10:27
make is that they think that they’re
10:29
smarter or they’ve got enough money or
10:31
they’ve got enough
10:32
time to do it on their own right or
10:33
they’re they’re they’re they’re looking
10:35
at it from you know very
10:37
short-term perspective right where
10:38
they’re saying well if i can just have
10:40
more of this
10:41
pie on my own then you know i’m going to
10:43
get richer quicker
10:44
right but we’ve run the numbers it
10:46
doesn’t work like that you take a bigger
10:47
pie and a smaller slice
10:49
and you’re going to make you’re going to
10:50
be more wealthy in the long run right
10:52
it’s a team because it’s a team sport
10:54
you’re leveraging not only people’s
10:55
money
10:56
their experience but their time too
10:58
that’s the most important thing that
10:59
people don’t
11:00
don’t they take for granted right is
11:01
time you can’t get that back
11:03
right you can always make more money and
11:04
ultimately by doing those things it
11:05
helps you avoid
11:06
making the mistake that will kill you
11:08
right you make mistakes it happens right
11:10
no and we team sport right you know and
11:13
it’s just yeah i mean i might have made
11:14
a mistake with my partner but you know
11:16
here i am and we’ve been able to build a
11:17
company we are right no
11:18
it’s not i mean you know it really is a
11:20
team sport right if i didn’t have a
11:21
partner we wouldn’t be anywhere near we
11:23
are today
11:23
right it’s very easy to have that
11:25
short-sighted mentality
11:27
but understand it’s about having you
11:29
know immediate partners about having
11:30
secondary partners maybe i guess
11:32
let’s call them primary partners right
11:34
well yeah what we’ve done is a little
11:36
bit different than some people are gonna
11:37
have deal partners right and some people
11:39
are gonna have actual business partners
11:40
like what me and ferris are disrupt
11:41
equity
11:42
and then you’re gonna also have other
11:43
people in your team right there’s gonna
11:45
be vendors right
11:46
having the right lawyer on your team is
11:48
important right having the right cpa
11:50
these people will keep you out of
11:51
trouble right these are some of the big
11:53
mistakes that people
11:54
oh let’s get that low rate you know
11:56
lawyer in here
11:57
don’t don’t cheap out on your part he’s
12:00
gonna he’s gonna he’s gonna be able to
12:01
put my ppm together guess what guys you
12:03
guys are setting yourself up for a big
12:05
problem right pay the extra money and
12:07
get the right team members in place too
12:09
when it comes to vendors that’s probably
12:11
one of the bigger things i totally agree
12:13
man you know so some of the things that
12:15
we have seen what am i missing man i
12:17
know that there’s plenty more right you
12:18
know big mistakes people make i mean
12:20
let’s talk about the process right
12:22
so maybe trying to actually here’s a
12:24
good one
12:25
trying to get greedy and on a specific
12:28
deal and what i mean by that is
12:30
the brokers control the keys whether you
12:31
like it or not right you might think
12:33
you’re being sly
12:34
you know saving a quick buck trying to
12:36
do a retrain for something that’s bs
12:38
yeah maybe you saved the quick buck but
12:39
that broker’s probably not going to want
12:41
to partner with you again because they
12:42
are a partner
12:43
so again don’t try to bs your way just
12:46
to save a quick buck because trust me
12:48
word gets around the people that are
12:50
just wasting people’s time and trying to
12:52
save a quick buck
12:52
you know what is to have no one enjoys
12:54
that right be a man of your word be
12:55
honorable
12:56
and you know really treat that
12:58
relationship with the broker
13:00
really highly right it’s an important
13:01
relationship so i think that’s when
13:03
people make right people that finally
13:04
get into a deal
13:05
they’re like all right i finally got a
13:06
deal i’m gonna you know the the trees on
13:08
this tree
13:09
and the leaves on this tree are not
13:10
green enough right like come on you’re
13:12
50 000 off right so i think that’s a big
13:15
one
13:16
yeah there’s and there’s tons of them
13:18
too right you know i mean i would say
13:20
the one of the biggest mistakes that we
13:21
had too was not understanding two parts
13:24
of the process right
13:25
you know the financing and the insurance
13:27
piece you know we’re certain we’re
13:28
starting to educate ourselves with our
13:29
partners right
13:30
on this at peak financing and strategic
13:32
insurance group but you have to
13:34
understand how financing works
13:35
and you have to understand how insurance
13:36
works right because if you get the wrong
13:38
loan
13:39
or you get the wrong insurance that
13:41
could be detrimental
13:42
to your deal right you know you ever
13:44
talk about giving giving the keys back
13:45
to the to the bank
13:47
you know which happened plenty of times
13:48
in eight nine and ten it’s because
13:50
people were over leveraged
13:51
right and so you need to have a partner
13:53
on your team that understands how
13:55
financing works and make sure
13:56
it gets you the right loan for the right
13:57
deal right same thing with insurance
13:59
right
13:59
you know you’re gonna try to skip a few
14:01
bucks and and save some money on your
14:02
premium
14:03
but what you’re not being told is that
14:05
your deductible is five percent and that
14:07
five percent equates a million bucks
14:08
so you’re essentially you’re
14:09
self-insuring that property do you have
14:11
a million dollars in your bank account
14:12
or does the operating account have a
14:13
million dollars in it
14:14
most likely not so if you have that hail
14:17
storm or
14:18
that wind storm and it comes in and
14:19
you’ve got two million dollars in
14:21
property damage guess what you’re paying
14:23
a million dollars out of your own pocket
14:25
you know some of this stuff we didn’t we
14:26
took for granted when we started off
14:28
right
14:28
we didn’t know what we didn’t know and
14:30
we’ve since educated ourselves on these
14:32
very very important parts of the process
14:34
right you know i would say one last
14:36
thing too because it’s bitten us in the
14:38
in the butt plenty of times
14:39
is picking the right property management
14:41
company doing your
14:43
due diligence on those companies right
14:45
talking to referrals
14:47
right understanding their understanding
14:49
of the market and how they’re looking at
14:51
rent growth and how they’re looking to
14:52
control expenses
14:54
and ultimately getting comfortable with
14:55
them because they they essentially have
14:57
the keys to your deal on a lot of in a
14:59
lot of ways right depending on how it’s
15:00
written up in the property management
15:01
agreement
15:02
they have a ton of power over the you
15:04
know if your deal is going to be
15:06
successful or if it’s going to be a
15:07
total
15:07
dud right so understanding that and
15:10
ultimately going and picking the right
15:12
vendor for that too is probably one of
15:13
the more important things
15:14
yeah i’d say a similar one too is maybe
15:16
understand who you’re buying from that’s
15:17
probably another
15:18
that’s actually a good that’s a good one
15:19
like understand who you’re buying from
15:21
the seller
15:22
helps will help you understand how
15:24
you’re going to run the property what to
15:25
expect we’ve learned that the hard way
15:26
right where you buy it let me give it
15:28
let me give an example that’s a good way
15:29
that’s actually a great one right so i
15:31
won’t name that we’ll name the property
15:33
but um you know the the seller they’re a
15:35
big big firm they had 50 deals or so
15:37
you know here in texas and we bought a
15:39
deal that they’d owned for 10 years
15:41
we knew it looked tired right but when
15:43
we as we came to find out
15:45
they were pretty much a step above a
15:46
slumlord right they had
15:48
pretty much put a band-aid on every
15:50
major mechanical thing at that property
15:53
and when we took it over we had a ton of
15:55
capex built in i think we had five or
15:56
six grand per door
15:58
yep i mean it was a big capex budget but
16:00
it wasn’t enough
16:01
right because these guys had run it into
16:04
the ground for last 10 years
16:05
so understand are you buying it from a
16:07
even these guys are legit they have 50
16:09
properties
16:10
but how do they how do they maintain
16:12
properties right get an understanding of
16:13
who the seller is right because
16:15
there’s some sellers that take care of
16:17
their properties and have a pride of
16:18
ownership
16:18
and there’s some guys that are going to
16:19
squeeze every last penny out of it
16:22
and leave you holding the bag right and
16:24
that’s ultimately what ended up
16:25
happening on this deal
16:26
and so from here on out we really take a
16:28
very hard look at who we’re buying deals
16:30
from right in our
16:31
are they legit firm and do they maintain
16:33
the property it’s important
16:34
you know what else are we missing other
16:36
mistakes people make
16:38
um let’s see so if anyone has so money
16:40
money through this every monday 3 30
16:41
central
16:42
we spend the first 20 minutes or so
16:44
doing presentations we’re talking about
16:45
mistakes new real estate investors make
16:47
if you have mistakes things that you
16:49
know definitely go ahead and leave them
16:50
a comment we’ll talk through them
16:51
but other things that we’ve seen what
16:53
else i was gonna say i was gonna say
16:54
just a just a drill down on a point that
16:56
you you brought up briefly earlier which
16:58
is
16:58
you need to get yourself educated right
17:00
now we’re not we’re not advocating
17:02
formal mentoring or coaching but if you
17:04
feel like you needed
17:05
that and then go out and make it happen
17:06
there’s plenty of groups out there i did
17:08
the same thing he did not right so
17:10
it’s all in the eye of the beholder if
17:11
you feel like you need that right
17:13
but you need something you can’t get in
17:16
and also you can’t say well i’m going to
17:17
get it just by
17:18
having an experienced partner right what
17:20
if that partner is skimming off the top
17:22
or doing something fraudulent you’re not
17:23
going to know
17:24
right so you need to have some basic
17:26
understanding of how the logistics of
17:28
this whole thing works there’s so many
17:29
moving pieces
17:30
and you need to understand that so you
17:32
need to get some level of training
17:33
and luckily with the with the internet
17:35
and everything that’s online now
17:37
there is a ton of free or low-cost
17:39
content on there
17:40
but you got to start somewhere right
17:42
read a book listen to a podcast
17:44
be on a webinar talk to people that are
17:45
doing deals understand the mechanics of
17:47
it
17:48
because you’re not going to be able to
17:49
go out and buy this deal and really your
17:50
lender will never lend to you
17:51
you’ll never have a real you’ll never
17:53
have any investors because they’re going
17:54
to know that you don’t know what you’re
17:55
talking about
17:56
right so have some basic knowledge
17:58
that’s probably you know educate
18:00
yourself is probably the biggest mistake
18:01
that we’ve seen where people just
18:03
they got more money than cents literally
18:05
people that might have a million dollars
18:06
in the bank and they think they can just
18:07
roll in and start buying deals
18:09
and maybe they maybe they can get one or
18:10
two deals across the finish line on
18:12
their own
18:12
but it’s probably gonna it’s gonna burn
18:14
up and and you know because at the end
18:16
of the day they don’t know what they’re
18:17
doing
18:17
right yeah no what else are we missing
18:20
what else other mistakes people make
18:22
actually another one is kind of similar
18:24
to what you said earlier it’s
18:26
you have a property manager but also
18:28
manage the asset asset manage don’t just
18:30
lean on the property manager
18:33
go learn how to be an asset manager take
18:35
a look at you know
18:36
understand what’s happening at your
18:37
property yeah and that goes back to
18:38
getting yourself educated
18:40
know what is involved in being an asset
18:41
manager so you can look at the
18:43
financials correctly and and know where
18:45
you need to push some
18:46
some leverage a little bit right yeah
18:48
the property management company is a
18:49
resource they’re there to manage the
18:50
people
18:51
but also ultimately you as the asset
18:52
manager the owner you’re the one driving
18:54
the ship
18:54
yeah they helped run the stuff it’s
18:56
there but you know if you’re off your
18:58
ship staff
18:58
is working the wrong side of the ship or
19:02
you know you were going to do a casino
19:04
party and instead they did a
19:06
something another type of ship party you
19:08
know that’s your fault right
19:09
help lead that charge so that analogy
19:11
didn’t go so well you’re doing better
19:12
earlier but no no no
19:14
but i i wanted to see if ben’s gonna end
19:15
up using that analogy
19:19
but the point is folks is that you need
19:21
to know what you
19:22
what what’s going on with the property
19:23
because ultimately the buck stops with
19:24
you
19:25
right so we could sit here and say you
19:27
know we’ve never made any mistakes but
19:28
that’s a bunch of crap
19:30
we absolutely have but as anybody knows
19:32
us and knows our reputation we will fall
19:34
on that sword and we will admit fault
19:36
and then we will come up with a plan to
19:37
make it better right and you know and
19:39
we’ve ultimately had to do that right
19:40
you know i mean we’re not going to sit
19:41
here and just say oh we’re
19:43
we’ve done we’ve been rock stars on
19:44
every single deal that we’ve ever done
19:45
that just doesn’t work like that right
19:47
so
19:47
understand that mistakes are going to be
19:49
made just don’t make them
19:51
twice right that’s probably that’s
19:54
probably the biggest takeaway from
19:56
today’s show
19:57
so we’ve got some q and a anybody got
19:58
yes any comments questions going to
20:00
leave them in the
20:01
the chat box so let’s see so jefferson
20:03
so ronnie said i’ll teach you when you
20:04
hang out this week great
20:06
we’ll see you wednesday jefferson says
20:08
happy monday ben and ferris we have lots
20:09
of snow here in new jersey we can bring
20:11
some there and test oh
20:12
whoa whoa whoa whoa and then he said
20:15
that’s a great
20:16
point about the deductible insurance
20:18
yeah there’s a lot of little gachos that
20:20
you like
20:21
we didn’t know that when we were
20:22
starting off right we had to get
20:23
educated on this stuff but
20:24
luckily that none of that stuff burned
20:26
us but it could have yeah you know
20:28
absolutely
20:29
you have to kind of do you just have to
20:31
get educated on all these different
20:32
pieces so one more comment from
20:34
john montero big mistake not
20:36
understanding your investment
20:37
slash deal box otherwise you’ll be
20:38
chasing every shiny penny on too many
20:40
bad days i love it very
20:41
sure yeah that’s why we’re friends with
20:43
you define your criteria right i think
20:45
just a little bit of everything and even
20:47
us we’ll do different things but our box
20:48
there’s different boxes for each type of
20:50
deal
20:51
because again like john said there’s a
20:52
lot of stuff out there
20:54
and if you’re you know if you’re too
20:55
vague you end up getting desperate or
20:57
you end up getting overwhelmed one of
20:58
those two things will probably happen
21:00
and honestly the brokers won’t think of
21:02
you because their box your box is
21:03
everything
21:04
versus if you know if i know you’re the
21:05
only guy that will buy a green
21:07
shoe right like speaking of it another
21:09
analogy right have a great enough
21:10
i know ben is the only guy that will buy
21:12
green shoes guess what the next time my
21:13
green shoe comes to the door i’m just
21:14
gonna i’m gonna think of ben is the
21:15
first guy
21:16
right first is if ben’s like i’ll take
21:17
any shoe well if a green shoe comes
21:19
through the door i’m not gonna take a
21:20
band i might think of some
21:21
whoever right yeah so that’s kind of
21:23
maybe the similar analogy right have a
21:25
very clear box because it also helps
21:26
the brokers remember you help the broker
21:29
source something specific for you
21:30
no and i’m big on not not taking a
21:33
shotgun approach when it comes to
21:34
you know acquisitions right you need to
21:36
have you can’t be like hey i’ll look at
21:38
anything over 100 units in texas
21:40
well that’s a pretty big box right and
21:42
you’re like like fair said you’re gonna
21:44
get overwhelmed or you’re just
21:45
ultimately never gonna get a deal across
21:47
the finish line because you’re too vague
21:48
right so know what that is stick to your
21:50
guns right
21:52
and you know unless there’s just a
21:53
smoking hot deal that maybe falls a
21:55
little bit outside your box that might
21:56
be all right we’re opportunistic too
21:58
you know so it’s not a rigid box but
21:59
it’s it might be able to expand a little
22:01
bit
22:02
but beyond that don’t go chasing that
22:05
crazy deal over there because somebody
22:06
said it was 20
22:07
returns right when you know you should
22:08
be staying in your lane a little bit i
22:10
think that’s a big mistake that a lot
22:11
especially
22:12
when people are starting off oh my gosh
22:14
i remember when i got into real estate
22:15
man it was like
22:16
it’s like just getting blasted in the
22:17
face with a fire hydrant right there’s
22:18
just so much information so many
22:20
directions that you could go
22:21
that you’re just chasing all these
22:23
different opportunities in real estate
22:24
and
22:25
you know i’m surprised i even stumbled
22:27
my way into multi-family but you know
22:28
here i am
22:29
right which is a niche within a niche
22:31
absolutely so let’s see so if anyone has
22:33
any more comments questions go ahead and
22:34
leave them
22:35
we have to talk to them money monday
22:37
they do this every monday 3 30 central
22:39
we talk about a bunch of different
22:40
topics today we’re talking about
22:41
mistakes real estate ministers make
22:42
but uh one more then we’ll move on so uh
22:46
trevor says ronnie is the king of cult
22:48
house absolutely he is
22:49
he is he’s the one but what else do we
22:51
got for people ben
22:52
oh and what’s next we’ve got our toolkit
22:56
folks right
22:57
we’ve talked about this several times in
22:58
the last couple shows this is where
23:00
we’re consolidating all of our stuff all
23:02
of our checklists all of our webinars
23:03
all of the podcasts
23:05
everything’s in this toolkit we’re not
23:06
trying to sell you anything go to
23:09
www.disruptequity.com
23:11
toolkit and check it out all we’re going
23:13
to ask for
23:14
is an email yeah not selling you
23:16
anything right but
23:18
on this slide i am going to try to sell
23:19
you something i’m going to
23:28
multi-family investor network coming up
23:31
here in houston you know right up the
23:33
road from where our studios are
23:35
you know but this is the last call so
23:36
put in coupon code yeah we are very
23:38
we sold out the vip already we’re very
23:40
close to selling off we’ve got 20 spots
23:42
left right we’re trying to kind of keep
23:43
it
23:43
covered safe cover compliant right we’re
23:45
not trying to bomb it out like we did
23:47
last year 400 people the mayor of
23:49
houston
23:49
the mayor hughes will not come out this
23:50
time but maybe next year yeah you know
23:52
he’s got some you know he’s got some
23:53
appearances you got to keep up right you
23:55
know but
23:55
at the end of the day it’s going to be a
23:57
fun conference we got robert hounds we
23:58
got mark kinney we got a bunch of
24:00
we got a bunch of panels we got a bunch
24:01
of breakouts people can learn a ton of
24:03
stuff
24:04
and they can ultimately find those
24:06
partners and those team members that we
24:07
were talking about earlier yeah so
24:09
what’s the what’s the url here
24:13
www.mfinvestornetwork.com
24:14
okay this is a coupon code last call so
24:17
we are expecting that we’ll sell out
24:18
this week so i’m excited we definitely
24:19
have all of our metrics this is not a
24:21
sales problem we have a lot of interest
24:22
so
24:22
a lot of speakers should be awesome i
24:24
think there’s a lot of pent up demand
24:25
obviously you know we have a big pretty
24:26
big following here in texas so it’s not
24:28
hard for a lot of people to come in from
24:29
central texas or dallas
24:31
so those of you that can’t make it john
24:32
mccarron um you know we’ll let us slide
24:34
this time all right
24:35
john we’re going to get you out the one
24:36
buddy you know one of these days but no
24:39
we appreciate john always helps us
24:40
support that so we had one more question
24:42
come in so seller self-managed the
24:44
property for 16 years has literally done
24:46
what you just described squeeze the prop
24:48
deferred maintenance repairs and more do
24:49
you have any tips to
24:51
renegotiate based on what we found
24:54
i mean yeah i mean if you have a
24:55
legitimate you know like you know where
24:57
you’re because you’re doing a property
24:59
tour right they’re going to they’re
25:00
going to manicure the the
25:01
the way that you do the tour and if you
25:04
weren’t able to see it
25:05
right if the thing was falling apart or
25:06
the roofs needed to be redone
25:08
right then you have a legitimate reason
25:10
to maybe potentially go back and do a
25:11
retrain now
25:12
we try not we don’t we use that we don’t
25:15
use that often
25:16
right because that’s a card that can
25:17
piss people off the rule of thumb is if
25:19
you couldn’t see it or you’re not the
25:20
expert in it and it wasn’t disclosed
25:22
you might you’re probably allowed to
25:23
renegotiate it right so i would say in a
25:25
situation like that i would get every
25:27
contractor under
25:28
the sun out there we had like 25 people
25:30
out on the
25:31
do-day deals right dig into everything
25:33
get a good sense with it and just get
25:35
comfortable right ultimately if the deal
25:36
works set a price
25:37
it works at that price if it doesn’t
25:38
work it doesn’t work right so don’t get
25:40
desperate to do the deal
25:42
right make sure you have the price that
25:44
you need to get all the things
25:45
cured and get all the things resolved
25:46
and moving forward but i mean you know
25:48
you typically so
25:49
you know we’re going to have a capex
25:50
budget going into our into our you know
25:52
acquisition right
25:53
my thing is okay i got a million dollars
25:55
if my capex
25:57
proposals come back at like a million
25:58
and a half two million we got a freaking
26:00
problem right
26:01
now if they come back in a million and i
26:02
just have to rejigger some things
26:04
then that’s that’s a different story
26:05
right but when my when all the deferred
26:07
maintenance and all these things that i
26:08
didn’t know and were not disclosed to me
26:10
blow up my rehab plan then we got a
26:13
problem we got a reason that we might
26:14
have to renegotiate right
26:16
the other thing too you’ll find out that
26:17
there’s way more vacants
26:19
than we’re on the rent roll or we’re
26:20
disclosed right so whenever you’re doing
26:21
your unit by unit walks
26:23
right you find out that hey instead of
26:25
10 units on 100 unit property there’s
26:27
40 units yeah you know that’s an extreme
26:29
example but you get my point right that
26:31
would be something that you could say
26:32
hey
26:33
you know i made an offer based on 10
26:34
vacant units and you got 40.
26:36
you know we need to renegotiate this
26:38
thing right you know it’s just called a
26:39
retrade for people that are kind of new
26:41
to the business
26:41
yeah great so then josh benfrost is
26:43
excited for infants so are we we’ll see
26:45
you there yeah buddy
26:46
19 days so go on so with that said
26:49
monday mondays are the show
26:50
monday 3 30 central friday four o’clock
26:52
so oh my gosh
26:53
talk about a bunch of different topics
26:54
today we’re talking about mistakes real
26:55
estate investors make
26:57
what are we talking about next week ben
26:58
oh my gosh if you have any comments
27:00
questions go ahead and leave them or
27:01
we can kind of catch them before we
27:03
finish up here but next week we’re
27:04
talking about what
27:05
tips for building your business plan as
27:07
a multi-family syndicator
27:09
so there’s a lot of things that you’re
27:10
going to have to kind of understand and
27:11
know and
27:12
you know in order to kind of build a
27:14
multi-family syndication
27:15
business you know you need to have a
27:17
plan right you know and i think we’ll
27:18
kind of go through some of the the tips
27:20
and tricks and
27:21
you know some of the uh the hurdles that
27:23
we’ve had to kind of go over
27:24
right yeah absolutely so we’re excited
27:26
about that one so with that said monday
27:28
mondays every monday 3 30 central we’re
27:30
going to go ahead and call it a wrap
27:32
unless we get any questions in
27:34
the next five seconds otherwise see you
27:36
guys next monday
27:37
when we’ll see a lot of you in not the
27:40
saturday night saturday saturday
27:42
afternoon
27:43
we’re still going to have a couple
27:44
months network.com conference so we’re
27:46
excited
27:47
flicking check out yeah check out that
27:49
url 150
27:51
off that’s a pretty good deal we’re
27:52
trying to sell this thing out this week
27:53
so
27:54
act fast and we’ll see you next monday

Leave a Reply

Your email address will not be published.