It is a major regret of my youth that no one ever bothered to tell me that working for a living was a drag, or that depending on a job to make you rich was a fantasy. I guess I was aware on some unconscious level that my dad's real estate investor friends were able to go to Europe for months on end while my friends' parents?even the ones with great jobs? were lucky to put 2 weeks of vacation time together each year, but I always assumed that my dad's friends had so much spare time because they were unemployable, never having been told that, despite their paint-spattered overalls and 15-year old pickups, they were multimillionaires.

In short, when I entered the "real" world after college, my education was sadly lacking in some very important areas. In the ensuing years, I've learned some lessons about the world of real estate?some painful (never give a big earnest money check to a seller until you know he actually owns the property), some pleasant (it is possible to hire other people to do the jobs you hate). Each time real estate investing teaches me something new, I wonder why somebody didn't just sit me down and tell me about it years ago. How much easier my life would have been if only someone had told me these things early on...

1. Real Estate Isn't About Properties, or Deals, or Financing.

About 4 weeks into my real estate career, I made my first deal on a house. In one of the most obvious examples of karmic retribution I've ever experienced, the seller of this house was one of the little old ladies that I'd once accused my parents of taking horrible advantage of. However, this particular little old lady surprised me by telling me right up front that all she wanted for her home was the loan balance plus $1,000 to move, despite the fact that the property was worth about $15,000 more than that. It seems that her husband had recently died, and that she was moving out of state to live with her daughter and grandchildren. In short, she wanted to be gone by the end of the month.

Now, while this was my first actual deal, I had made approximately 100 offers up to that point that went nowhere. Like many first-time investors, I hadn't fully absorbed the lesson that real estate was about people, not properties; as a result, I had made all of my offers on houses where I thought the seller should be motivated to sell for some reason. I never once asked whether or why the seller wanted to sell cheap, because, hey, the house was ugly right? Who wouldn't be ready to sell cheap?

 

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