15 Years of Real Estate Investing Advice in 15 Minutes

0:00 My real estate investing education cost me over a million dollars in mistakes. Yours is about to cost you 15 minutes. Here's the problem with real estate investing online. They're just showing you a highlight reel. They're showing you the wins, the cash flow, and the financial freedom. But no one's showing you the $12,000 roof replacement or the tenant who stops paying rent in month three. Real estate investing is absolutely the best wealth building tool for regular people. You can replace your entire salary in just 8 to 12 years. But those 8 or 12 years do not look like what you see on Instagram. I don't own a Lamborghini and I didn't scale to 100 doors in my first year. Real estate investing is simpler than you think. You buy houses, you fix them up, and you either rent them out or you sell them. But going from simple to profitable, that's the tricky part.

0:52 Let's start with lesson number one. So, lesson number one is know what you're aiming for. This could not be more important in real estate. You absolutely have to have a goal. Because even though we call it real estate investing, what you're really doing when you're a real estate investor is starting a business. And you have to have a business plan. You have to know what you're ultimately trying to accomplish with the time, the effort, the money that you're inevitably going to put into real estate. And if you don't spend the time to do that up front, it can really come back and kick you in the butt later in your investing career. There's a quote that I really like. It's from Zig Ziglar and he said, "If you aim at nothing, you'll hit it 100% of the time." And I think this is so true for real estate investing because there are a lot of ways to transact. A lot of them are great strategies. You could do short-term rentals. You can do long-term rentals.

1:53 You could do BRRRRs. You could do flipping. But if you actually just go out and start transacting before you figure out what you want your portfolio to look like well into the future, you might actually buy the wrong kind of deals. And ultimately, that can cost you a lot of time, for sure, but can actually cost you money as well if you have to reallocate and restructure your portfolio years into the future. So, what I recommend you do is take a step back. I know it's not as fun as going out and just buying the first thing you see, but just take a step back and figure out what you want to accomplish.

2:29 Are you trying to retire from your job in the next 5 years? Are you trying to build slow and steady wealth alongside a traditional job? Depending on how you answer that question, the type of deals, the type of portfolio you're going to want to build could look completely different. This lesson took me about 6, 7 years into my investing career before I learned it. I was going out and acquiring properties, and they were successful deals, but I didn't really have a plan. And one day, I woke up and realized the portfolio I was building wasn't exactly getting me closer to my actual long-term goals. It was making me money, which was great, but it was a lot of work. It was a lot of effort. I was buying old properties that required a lot of hands-on attention. But, the whole reason I got into real estate in the first place was because I wanted more time. I wanted more control over my financial future. And so, going forward, I realized I was going to buy newer properties. I was going to buy properties that didn't require as much of my time. I was going to invest passively alongside the active deals that I was doing. And since I did that, since I set that goal for myself, every single deal that I've done has got me closer to my ultimate goal. And that has made my real estate less stressful, it's made it more successful. It's reduced a lot of the risk outside of my portfolio, and it is something that every single real estate investor should be doing as well. So, lesson number one, took me a long time to learn, but you can learn it right now, is to have a plan and know what you're aiming for.

4:09 Lesson number two is to think long term. I know there are a lot of people on YouTube or on social media saying that real estate can get you rich really quickly, and in some rare instances that is true, but real estate is not a get-rich-quick scheme. It is a slow and steady way to build wealth. Might not be get-rich-quick, but it can be get-rich-for-sure if you do it well, and to me that's a whole lot better. You need to start thinking about real estate investing not as some destination far into the future, but a process that you are going to work on over the next 7, 8, 15 years. And if you work on that process and continue to get better at the things that you do, you don't have to be great at it on day one. That's the good part of this. But if you just continuously get better and think about that long-term destination that you're going towards, you can be successful in this business. It does take time though.

5:13 Unless you want to work 50 hours a week in real estate, it's going to take 10 to 12 years. Now that I've been doing this for 15 years, I can tell you that it actually goes fast. 15 years to get financial freedom, to have control of your financial life, it is entirely worth it, and it goes a lot faster than you think because it's kind of fun, right? The first year you do have to grind, you have to hustle it out. But if you can say, "Hey, I just need to put a couple hours a week into this for 15 years, and I'm going to retire 30 years sooner than most other people. That's incredible. That long-term approach not only helps you sleep better at night, and I can tell you from personal experience, it does help you sleep better at night. Real estate doesn't really stress me out cuz I'm thinking long-term. I'm not as worried if I have an expense that comes in for 500 bucks or 1,000 bucks cuz I'm not living off that. I've always been planning to live off of real estate well into the future.

6:14 And that allows me to make better decisions in the short term about my portfolio. The stress relief part of it is real, but I also think that it improves your chances of success. I think a lot of people think, "Oh, I'm going to go all in. I'm going to grind really hard at this for short period of time, and that will improve my odds of success." I actually think the opposite is true because real estate, the way it works, the reasons it's so great, things like amortization and appreciation, and the devaluation of your debt, like all of those things, they take time to mature. It's like a fine wine, if you will. Like real estate deals get better over time. So, if you try and force those things to go faster, that increases your risk. But if you wait, recognize that you can't time the market, recognize that you need to be in it for a couple of cycles, that time that you spend in the market is the key.

7:11 It's arguably more important than the deals you buy or the markets that you buy it. You got to pay attention to those two, but thinking long-term and allowing time for your deals in your portfolio to mature is something every investor should be doing. So, that's lesson number two, think long-term. >> What if your rentals could practically run themselves and give you a chance to win $10,000? That's exactly why I'm excited about Baseline's 10K giveaway. When I first started investing 10 years ago, everything was manual. Rent came in to one account, bills went out from another, every transaction had to be tracked. I was constantly moving money between bank accounts, and I could never fully switch off. What changed for me was switching to Baselane. It's BiggerPockets' official banking platform, and with integrated bookkeeping, my rental finances are fully automated. Rent and payouts are deposited into dedicated property accounts, transactions are automatically categorized, and every property's finances stay organized in one place.

8:07 The biggest difference isn't just the automation, it's the peace of mind. I spend a lot less time managing my rental finances, and a lot more time focusing on growing my portfolio and enjoying the life I'm building. That's what banking that runs your rentals looks like. And right now, there's an extra reason to make the switch. Enter the 10K giveaway. Just deposit qualifying rental income into Baselane for a chance to win $10,000. Sign up now at baselane.com/bp.

8:35 >> Lesson number three is underwriting is the number one skill that you have to have. If you can underwrite deals, which is just another word for analyzing deals, just figuring out which deals are good and which deals are bad. If you can do this, you can succeed in real estate. I often talk about this, but real estate investing is really just a math problem, right? It's not reinventing the wheel here. All you have to do is understand which properties are going to make you money and which ones aren't, and only buy the ones that will make you money.

9:09 It's not complicated. You can go on the BiggerPockets calculators, it will do all the math for you. But, there is a skill I want everyone here to work on and to learn, because I think it's the most important skill a real estate investor needs to have. That's figuring out what assumptions that you put into those calculators, right? Cuz if you just make up a number for rent or what the after repair value of a property is, you throw it in the calculator, doesn't really do you any good, right? So, what you need to be good at is figuring out what to put into that calculator. What is the value of the property? The true value, not what someone listed for. What is the true value of a property that you're buying?

9:51 What are the renovation costs going to be? What's the after repair value? If you buy something and fix it up, what's it going to be worth after you put that time and money into it? What are rents going to be? How about expenses? These are the questions that you as an investor have to focus on. Don't worry about the math, and don't fall in love with the numbers that an online calculator tell you, because it's just going to spit out what you put into it.

10:17 Spend your time scrutinizing, analyzing, then reanalyzing your assumptions and inputs into those calculators. And if you do that and get very, very good at this, if your accuracy at your assumptions and your calculations are good, you can succeed. So, if you want a skill to focus on, this is it. Spend the next 6 months getting great at this, and you'll thank me later. Lesson number four that took me a very, very long time to learn, maybe 10 years to learn this. Operations are easy and are easily outsourced.

10:51 Operations, which is just basically running your property, like doing your taxes, doing tenant screening, doing the property management. These are the things that most people obsess about. It's the thing that I hear most often about. I don't want to be a landlord because I don't want to deal with tenants, or I don't want to deal with maintenance requests. I think it's the number one thing that prevents people from actually getting into this industry. But the reality is, after doing this for 15 years, I can tell you this, it's just really not that hard.

11:21 It's not that big of a deal, and if you have basic professional skills, you can do this. With software these days, it's getting easier all the time. This operations, or fear of operations should really never be the reason you don't buy a deal. Now, I'm not saying you should go out and bite off more than you can chew, but you can absolutely figure this out. Running a real estate portfolio is actually not that complicated. I think the first 10 years of my investing career, I made this mistake. I worried so much about every little detail of my properties because I wanted my tenants to be happy and I still do, but I realized I didn't have to be so involved to yes, give my tenants a safe, comfortable, nice place to live and a place that still makes me a solid return. Really, all you got to do is be responsive, have good communication skills, be reasonable and respectful to your tenants, and know who to call when things go wrong. Like it's really that easy. It might be stressful at first when you don't know who to call and you need to figure some of these systems out, but you will get over it because once you get into this, you'll realize it's not that hard. So, don't make the same mistake I did growing more slowly than I needed to because I was bogged down in operations and assuming that I couldn't go and scale. Get over your fear of this, learn the skills you need, and then focus your time on deal acquisition, on underwriting, and the things that will really make a difference in your portfolio long term.

12:49 Our last lesson for the day is it is a relationship game. I told you it's a math problem and that is true when you're figuring out what deals to buy. But when you zoom out and think about your portfolio and the success of your portfolio over time, it honestly comes down to the people you know and the people you work with. The reality is the best deals that you get come from referrals. The best renovations that you do come from working with great contractors. The best offers are made when you have a great lender and a great agent. And this is a mistake I made earlier in my career because I just didn't enough on building my network. I was kind of just focused on operating each and individual deals to that best of my ability. And I was doing that, but I could have outsourced that. If I had a better relationship game, if I was better at networking, I would have recognized that I could find a great property manager in my market to offload a lot of those operations to someone else. And then I could have spent my time working with wholesalers, working with agents, building relationships with title companies so that I would get better deal flow. And when I found better deals, I would get better financing. And when I had a problem with one of my deals, I would have more people to call. Even in today's age of AI and social media and software, which you need for building a successful real estate portfolio, one of the biggest differentiators you have in whether you succeed or not in this industry is the network that you create. First and foremost, you got to find an investor-friendly agent. That's the number one thing that most people need to do. You can go to BiggerPockets.com and get matched for free with one of those. You need an investor-friendly lender as well. Those are absolutely core.

14:37 Having a property manager, if you're going to be more passive, is super important. And then, just start meeting other investors. I know people think that working or talking to other investors, they're competitive with each other. But I have learned over 15 years of doing this that most investors are really collaborative. They want to partner on deals. They find a deal that's not right for their goal and their portfolio, and they'll pass it along to you. Those kinds of connections, those kinds of trust, mutually beneficial relationships are invaluable to real estate investors. So, focus on building those four relationships first, then you can focus on wholesalers and contractors and title companies later. Having relationships in those four categories are going to be hugely beneficial to you as an investor.

15:24 Those are the five lessons that over the 15 years that I have been investing in real estate that I think are the most important for investors to focus on whether you're just starting out or you're scaling up your portfolio. These are the fundamentals of real estate investing and unfortunately, sometimes they're not that obvious. There is a lot of noise out there in the real estate investing world about what strategy you should be focused on or the best way to retire in just two years. But in my experience and having spoken to literally thousands of successful real estate investors over the years, I can tell you that if you focus on having a goal and knowing what you're aiming for, thinking long-term, getting really good at underwriting and the assumptions that you put into that underwriting, not being intimidated by operations and figuring out how to outsource those and building relationships. If you can do those five things, you can succeed as a real estate investor. That's what we got for you today. Thank you so much for watching the BiggerPockets YouTube channel. I'm David Meyer. I'll see you next time.