Author Topic: The Tough Reality of Seeking Financial Independence Through Real Estate  (Read 5671 times)

BusinessAndRealEstate

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As a fellow real estate buy and hold investor, I found a pretty grounding article on what it takes and what it is truly like to be a real estate investor. Like many people, including the author of this article, I chose the route seeking financial independence. What I found was exactly the opposite of what I thought I'd find. But I still for some reason love every minute of it.

[MOD EDIT: Spam link removed.] 

It is not always as glamorous as people and gurus make it out to be. It takes true passion and support from everyone including; spouses, friends, family, and your real estate team. I really hate when experts over-hype what it takes to succeed in real estate investing. It gives the industry a bad wrap when people fail. It also makes the industry look bad when real estate investors use immoral means and methods to buy and sell deals. Further more when I look for deals, I always stumbled upon accidental landlords. The one major issue that I notice is that most people that are investing in real estate are "accidental" investors. They were forced into the investment and now have to rent out their properties because they cannot afford to sell it for a loss... This creates three problems

1) They start there investment off wrong- every investors knows that starting the investment wrong is a horrible position to be in.
2) They do not treat their accidental investment as a business
3) And because of #2, the investors actually open themselves up to so much more risk which can be more of a liability because they can get sued. And the amount of the law suit would most likely be more than if they took the original loss and sold the place.

What I am trying to say is that I agree with the article that being a real estate investor is very difficult in the first place. When you have a full time job, or are an accidental investor who is not fully committed, the ramifications could be a lot worse for you if you are not fully prepared. Would you agree or disagree? What was your biggest life challenge that YOU faced along the way to financial Independence?
I hope this sparks some meaningful discussion about being sold the dream of FI/ RE but never told some of the realities.
« Last Edit: April 03, 2016, 12:20:19 AM by arebelspy »

trashmanz

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Job or no job. Accidental or not. Being unprepared is always a recipie for potential disaster.

BusinessAndRealEstate

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That is for sure!

Retire-Canada

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You should probably post this in the Real Estate sub-forum:

http://forum.mrmoneymustache.com/real-estate-and-landlording/

hoping2retire35

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Eh, tough reality seems a bit strong. Anyone who thinks the $5000 workshop is really going to make them a real estate expert is being naive. Of course doing your own basic renovations is necessary to "succeed" in real estate investing. (that is relative and so is "basic" renovations). What they stated for renovations is basically my plan when I start to amass.

Mr.Tako

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Informative article!  Thanks!  It always sounds like too much work for too little return.  I'll be skipping the real estate investing for now. 

I'm not criticising other people's choices, but I actually want to enjoy my early retirement.
« Last Edit: March 18, 2016, 02:26:01 PM by Mr.Tako »

Frs1661

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You should probably post this in the Real Estate sub-forum:

http://forum.mrmoneymustache.com/real-estate-and-landlording/
He already did, and it did not go well: http://forum.mrmoneymustache.com/index.php?topic=52806.0

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zephyr911

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Scare tactics to soften you up for a sales pitch? Get this out of here.

hoping2retire35

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I knew that OP post sounded weird never could put my finger on why. I guess outright deception isn't typically on my radar. twice no less!

powskier

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mmmmmmmmmmmm spammy post?

Real estate is great IF YOU DO THE NUMBERS RIGHT. It isn't "passive" income but if done intelligently can be a fantastic wealth builder.

arebelspy

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Re: The Tough Reality of Seeking Financial Independence Through Real Estate
« Reply #10 on: April 03, 2016, 12:43:24 AM »
Spam link in the OP aside, real estate can be a great accelerator towards FI, or a great hindrance, depending on if it's done right, or wrong.

I haven't been on the same continent as my real estate holdings in the last seven months, yet they continue to send me cash flows every month.

Sometimes I deal with issues (yesterday got a text from a tenant the oven wasn't working--handyman was going over to trim trees anyways, checked and needs a new control panel--better to replace than repair, at this point, ordered a new one on Home Depot's website, should be delivered and installed in a few days.  Total time: 2 minutes texting, 5 minutes ordering online), but I could turn it over to my property manager if I didn't want to (it just pays something on the order of $500/hour to DIY at this point, since everything's set up already), and at some point I will (and have, for about half my properties).

There's drawbacks, of course, but there's also many benefits (such as a much more stable than a "SWR" via less sequence of returns risk/rent volatility).

I feel like a lot of people think they don't want RE in ER, because of the "work" it will take, but I spend more time tax loss harvesting and rebalancing than I do on my managed real estate.  Setting it up properly is key, of course.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.