Contrdictions. An adrenaline junkie? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on May 02, 2002 at 15:36:07:
I saw your other post where you indicate that you have bought two duplexes already. Congratulations. You are doing fine.
Now, you also say you feel you are not moving fast enough. Your course is common for those who are buying for the long-term–holding rental properties. You feelings are pretty common. Many people drop out of investing or at least acquiring more properties because they don’t see great increases in their wealth as soon as they thought they would. Long term investing does not work that way, usually.
What happens is that for the first few years of your long-term real estate investing career, your net worth goes up very little. In fact, you may have a down-turn when you start because of educating yourself, buying tools, paying closing costs–which are not recoverable.
Then, in a few years, you will find your net worth is increasing at an accelerated rate. Your properties are appreciating in both market value and the rents that you can charge. The mortgages are being paid down. You have more experience. You are more efficient and effective. You are probably buying more properties a little faster, too, perhaps using the saved cash flow from the existing properties or from refinancing cash out.
Later still, your net worth is shooting up, for the reasaons mentioned above, plus you are getting loans paid off, you are buying more or bigger properties. You really know what you are doing, and you may be hiring other people so that you are leverage your TIME.
During the early years, with a few rentals, such as you have now, you can develop your system. Get together your bookkeeping operation, your policies, your particular investment style. You will be learning better how to do everything. If you have only a couple of properties, the demands on your time will not be too great. You can contemplate how you want to go. You have less at risk, so will not be as worried. You can experiment with a few different investment ideas and management approaches, if you wish.
Now, you seem to have two contradictory things mentioned in your post here. You complain of lack of time and you complain of not “moving as fast as I would like to move.” You may not even have an investing problem. You may just have a need for more excitement or action. Maybe you are really an adrenaline junkie. If so, you might either try to get out of that state or you might change your investment program to provide that excitement that you want.
The gambling personality is not one with which I am familiar–none of my family, acquaintances, or friends are like that. However, perhaps that is where you are.
Here are some more exciting ways to invest in real estate than in long-term rental holding–which tends to be rather boring, really. I know, because I do it myself.
Buy properties at auctions. I like the excitement of auctions myself.
Become a developer. These people typically live on the edge.
Become a buy and resell quickly investor. Probably not as exciting at the previous suggestions, but certainly more exciting than buy/hold/rent investing.
You might also consider buying more rental units as fast as you can, so that you put a lot more pressure on yourself. Maybe this is what you really wand.
Now, it will be somewhat difficult to do the above in limited time. But that is how many people start out. I use the time before breakfast to call to my property managers and others in OK, two hours ahead of me here in CA. I use my lunch time to go to the post office and bank, pay bills, and call people. Work on my current properties on the weekend. Some work can be done after work, too. Just yesterday evening, after work I downloaded information for many properties and their owners so that I could send my solicitation-to-buy postcards out. Then played bridge a couple of hours after that. I’ll probably see about 6-8 hours of TV this week. And somehow I don’t seem to miss seeing more.
Does this reduce social time or family time? Sure. You have to choose what you want to spend you time on. You and I and everybody else have the same amount of time allocated to us. How we use the time is up to us. You may find that you have been doing activities that really don’t “pay off” much for you. I don’t read magazines anymore, used to read several each month. I still read a few real estate investing books and similar books, but maybe fewer each year than in my earlier days.
So, perhaps just a little self-examination and discussion with others about your personality and approaches may be all you need now.
Good InvestingRon Starr*******