Today’s a really useful topic because
we’re talking about the worst ways to invest in real estate. Listen, you hear me
talk all the time about the best ways and the ideal ways and the best
strategies and the formulas for success but you know what? The reality is, I meet
so many people that are dogging it and they’re making choices that are hurting
them financially so today I’m going to be sharing with you the top two worst
ways that I see most investors get started that end shortly with quick
regrets. Today we’re talking about the worst way
to start investing in real estate. Steven, we have heard our share of horror
stories over the years working with a variety of men and women everywhere who
jumped into real estate and had a really souring experience right out of the gate
and they quickly became what we call don’t wanters. Steven, what’s a don’t
wanter? – A don’t wanter is someone who don’t want to do it anymore. – They don’t want
their real estate anymore like save me, save me. Throw me a lifeline. – You know, I think most people, the biggest
problem is they jump into real estate without a plan and we talk about plans a
lot here. Having a plan is super critical and crucial in having success in real
estate but if you see, you’ve got your aunt, your uncle, your good friend
over there that’s done real estate, they’ve had some success and so because
you see them doing all these things, you just kind of, you know, close your eyes,
pinch your nose and you jump in the water, right? That’s a horrible
plan, that’s not a plan and so because you do that, you get into a space
where oftentimes you have no idea what you’re doing, you don’t know what your
goals are, you start getting bombarded with the pains that real estate can
offer because by the way, can real estate hurt sometimes?
– *speaks German* – That’s German for it hurts. Sometimes real estate can hurt
and the reality is, if you don’t have a proper plan in place then when that
hurt comes along, when it smarts just a little bit, it’s going to stop in
your tracks so and you become a don’t wanter. – Today we’re going to be talking about the two worst ways to start investing in
real estate and the first one we want to start with is the flip. There’s a lot of
people attracted to flip. Now by the way, we’re not saying flips are bad but flips
require a level of some know how, some experience is helpful and
so a lot of people will jump into a flip and when they haven’t properly run the
numbers, they haven’t thought through everything and often, real estate on
paper ends up being very different than how it turns out in real life and so
what I’ve seen happen many times with the flip is someone jumps in on a deal
that has less margin or less to gain than what they had thought or what they
had hoped for or number two, they hadn’t appropriately planned on how much the
property would take ten thousand dollar repairs turn into thirty thousand
dollars in repairs or they got into the project and all of a sudden they start
peeling up the the flooring and the walls and started realizing, oh my gosh,
there’s way more problems here or they start going overkill on doing way too
much work. A flip is a great way to sink the
family farm right out of the gate and it doesn’t mean don’t do it but it does
mean that this is one of the worst ways that you can start your investing career,
is going in with no experience right into a flip. Steven, if someone didn’t
want to do a flip and want to do it correctly, what advice would you give
them? — I mean, if you want to do a flipping, you want to do it right. I would say number
one, find someone who’s had experience doing flips. – And how much experience by the
way? – I mean, you know, we say this all the time but unless you’ve done probably a
hundred or more of a specific type of real estate, the chances are is you’ve
got the door wide open for some massive failure so I would find someone who’s
done a lot of flips, someone who’s done a hundred or more flips, they understand
how it’s done, they understand the ins and outs and
that doesn’t mean that there aren’t going to be little things that may come
up but it does mean that they’re going to be able to really prepare you for what
is going to happen right because with real estate it’s not about if, it’s about
when it’s going to happen. – And I would say a lot of flips that are at the price of
the home median or lower in your area, a good flip is usually going to make a ten,
twenty, thirty thousand dollar profit. It can sound like a lot of money but you
can lose ten or twenty thousand dollars really fast on having miscalculated the
after repair market value of the property or how much the property really
needed or some unknowns when you got into the deal so that’s one of the
things for you to be aware of. Okay, the second worst mistake that investors
make hands-down is they get into a 30-year rental property and become a
landlord on a deal with no equity, that becomes high maintenance and that is a
fast road to don’t wanters and you actually start getting phone calls for
the broken toilet and fix this and my door squeaking, you have not set yourself
up very well and you’ll start quickly realizing, oh my gosh, what’s the deal, why
is everyone saying that real estate is such, like, this is a nightmare.
– I’ll tell you what I want. What I want right now is for in the comments below,
for anyone that’s watching this, if you’ve had a bad I’m a landlord and I
hate it experience, in the comments below, we want to hear your
experiences and your stories – Teach us, share with everyone what
you’ve been learning. – Because the reality is, most people or almost everybody
that gets into real estate who becomes a landlord, at some point in their career,
decides I don’t want to be a landlord anymore. I don’t know anyone who says, oh,
I just love being a landlord. No, people love what real
estate can do for them, people love the returns, they love the
equity and the growth of the cash flows, they don’t necessarily love the problems
that come along with being a landlord. – Yet now being a landlord is not
necessarily all that bad, this is when it goes wrong, when we talk about the worst
way to start investing on a 30-year project of buy a home, 30 years from now,
it’s paid off, this sounds smart, right? There’s one of two mistakes that
generally get made. Number one, there’s not enough cash flow. So when the
property has maintenance, when it has needs and you’re starting to pull money
out of your pocket or every single time the tenant calls with wanting more,
wanting this or wanting that, you’re going to start hating
it because when money’s tight and you have to fix the incinerator under the
sink or whatever it is, it’s like nails on the chalkboard. The
other problem that people make with this worst way of getting started with that
and become it don’t wanter landlord is that they don’t buy the property of the
equity. Here’s what that means, I bought a property, someone said, I see this all the
time, “Hey, I watched some videos. I heard that I should get into real estate so I
bought a home.” That terrifies me, that usually means a person said, “Hey, I found
a home that was worth two hundred thousand. I paid two hundred thousand for
it. I rented it.” And what you’re going to do is, first of all, if you get in a bad
pinch where you need to sell that house, I’m sorry but the 6% you pay in
realtor fees to sell a home plus the closing costs plus any motivated drop
sale, you can buy something for two hundred thousand and if you want to sell
it for even just two hundred thousand, you might be walking away with fifteen
or twenty thousand dollars out of pocket so because you don’t have that safety
margin that Warren Buffett talks about, that margin of safety, that’s another
thing that will really get you in trouble because you only have one option
then it’s like, either take a twenty thousand dollar hit that a lot of people
can’t and it means well now I have to hang on to this property and I have to
do the maintenance and I hate this half to property that I no longer want so if
you don’t buy your, this is really what we’re saying, if you don’t buy property
right, that is a quick way to start off in the worst way possible and say, real
estate sucks, real estate doesn’t work. I don’t know what all these people are
really talking about but I do want us, Steven to throw a little bonus for everyone
right now which is, what would happen if you took the benefit of a flip which is
good money up front and you were to combine it with landlord and what if
there was a perfect hybrid? We would call that our
lease option system. In fact, if you go ahead and click the link up
here and actually, you know, go through and see some of the different services
that we offer, we’ll share with you what we believe as opposed to the worst way
of starting, we’re going to share with you the most intelligent way that you
can get started which is, how do I get paid up front for my real estate, how do
I hold it for a short period of time, how do I maximize my cash flow on it, how do
I walk away from all landlord-isms on it and then how do I eventually sell it and
trade up for a lot more real estate to give me the same benefits. Well those
would be the best ways that you can get started in real estate so click up here
and get started Have you had a bad real estate experience? Did I just describe
your story or if you found other ways of how to not invest in real estate, comment
below, share that wisdom with us but also if you want to know the fastest track,
the most accelerated track for getting where you want to go, click the link, get
in touch with me and my team and let us enlighten you on some of the options that
will give you your shortest path to success.
I hope you guys want to become global. Can you please advise about property in South Africa. An apartment costs about 60% of my salary. And how soon can I start generating cash flow after buying a rental property.
My mom never wants to be a landlord again . She owned 5 houses . But from my perspective she wasn’t vetting her tenants out really well she’d rent to whoever showed up with money . Lots of damage to our houses , having to evict tenants which gives them more time in your house for free . It’s not an easy thing to do is have rental property but I think that I could do it learning from her mistakes
So you make your money when you buy the property not when you sell it.
Dollar Tree has razors.
They are absolutely right investing in Canadian real estate is worst on planet
what are your thoughts on buying a house that was foreclosed on?
This is what happened pals, bought house in 2015 and did ~2000e reno, sell it (2018) about 4000e brofit, when bank got me the money that i had put in every month i got huge euros. Then my head clicked that i need to get wealestate rental going on! Watched all kind of vids and read some books, I need to get going asap! Greetings from Finland.
hey Chris how do I gain money if I don't flip I just decided on what I want to become so I don't really understand
Just found you guys. I have been a real estate investor wannabe for a few years. Even invested in a coaching program that was less than what I needed. The coach didn't live in my state. Well, anyway, your program sounds good. Anyone out there in YouTube land care to comment on it? Thank you. Interested but wary…..
Its a shame because here in Quebec Canada, lease-option doesnt work like in the usa.. The landlord still have to pay for all the maintenance/repairs costs. Otherwise I would have a home right now. What should I do?
Can you make a video on Wholesale or if you have link the video please.
Hi Chris I live in europe and woek in one city but live in different one with my parent I make prety good money at work and thinking about buing a 3 bedroom flat if some kind of finnancial crisis arrives and prices get a bit lower I can get 3 bedroom flat for 130 000 euros with laws here I will have to pay 30 000 from my money rest I can borrow ( I have that 30 000 prety much cash) Im thinking about renting one room while living in other one from which I can earn from 150 to 200 euros and lowest montly payment I can get for that kind of money would be around 450 euros (can afford much more to pay even 600 to 800) monthly what do you think about this is this a good way of lovering your costs while obtaining equity ? This way I can keep controll over my property plus Im prety handy so can I reconstruct it piece ny piece. Is this maybe a good way of startimg property renting for beginers ? Thank you.
can you talk real estate investing with building a property to sell?
Spot on brother! Lets colloborate on a video, I do real estate in SoCal & got a pretty good setup!
More headspace in your videos would be nice. Feels so cramped.
First time landlord: Rented to a co-worker (former boss). Stable job, etc. Immediately had money issues and got fired 1.5 months later. Took 4 months to get him out between eviction and getting it sold. Whole ordeal cost me $12,000 out of pocket. Will close and exit July 27th this month. Will net $55,000 – $25,000 down payment (pay back to myself) – $12,000 in carrying costs, I will realistically walk away with only $18,000 after 2 years of owning. I originally bought the house traditional retail. I will never pay retail again!
Have you heard of latvia kris, is it a good place to invest because i hear they cannot negotiate price of real estate.
I am a land Lord my first property. At first yes I made a lot of mistake picking my tenant. So i have hora stories on tenants. But that thought me to be a better land Lord. Now I get tenants that dont leave stay for a long time and pay there rent on time. Cool right. Now I have a way that gets u the best tenant every time. And I am happy cus my house was a good investment.
inhereting bad tenants, i had a guy on welfare so couldnt touch his "income", thenhe didnt pay 3 months and i kicked him out while he just went to sighn another lease.
when you find out you have more and more costs, saved my self so much by getting lots of estiamtes
Awkward gay moment…
you keep on mentioning buying property with equity, but you don't explain what it means.
A lot of great points were made here in a very long winded way. Also borderline scare tactic-ish.
Unfortunately in my area, Texas, a lease option has a lot of downside due to legislation preventing them.
Thank you for sharing!
Hi Kris, I’m very interested is starting up a rental property. I would love to have some one on one advise about a plan that I have been thinking about. I’m 27 and ready to dip my toes in the water but don’t want to drown. Would love to swap emails if possible thanks.
I'm in the process of selling a paid off home because of all the reasons you described here. You did pretty much describe my story. Even after paying off the home, between PM fees, maintenance, taxes, and a renters market which made me lower my monthly rate, I was clearing maybe 2k/year. Garbage lol. However, if anything I'm more interested in learning and digging in and figuring this out.
what"s a good equity % to look for in a buying a property?
Well let’s see. I had to hang on to a property in 2008. It was worth 320k. Now it is worth $1,000,000.
Any tips on if it’s a good idea to buy rental property using a $0 Down VA Home Loan ?
I am just getting into the real estate scene and my parents are buying a small house for $175,000 while it is valued at $200,000. The plan is to have me go in and fix up the place in exchange for some of the profit when they sell. I also get to live in the house while i work on it. This all Sounds like a great deal with equity but now we found out that the house needs a new septic system, which will cost $12,000. This news will make it a lot harder to make a decent profit with all the work that the house already needs.
Wish us luck…!
My first realestate was a unit ( appartement ) I rented it out through a realestate agent, the renter didn't pay, when he left I got in there and did a complete renovation I am an x tradesman and I did the work myself, I sold it at a record high, and was able to do an important next thing in my life ( realestate but not profit based ), however doing a complete renovation yourself rely tests you and is not good for your happiness ( may be better of as a driver and that's rely saying something )
I've been a Building Super and Property Manager for 20 years, just bought my first apt for rental.
if i found a house for say 110,000 dollars and its worth is 160,000 i buy the house and in turn make my payments on my mortgage and sell the house for 190,000 leaving a little negotiation room or wiggle room rather of 190,000 someone will buy it for at least 170,000 thinking theyre getting an all around deal pay off the mortgage and keep the profit then take what i profited and use it to buy another house mortgage free and start my equity that way where i dont have to loan but rather borrow against and boom im in the game and now i have two houses and i do it again and after four times i will have 200,000.00 in equity
this is figuritively speaking not saying it works but just inquiring
im 18 Chris and i really would like to learn what u know while im young so i can have the best life that i can have
7:13 huh? LMAO
I'm 14 but I really want to do this🙁 I have read many books about real estate. And know how it works
Hey Chris my name is Nikolas I think your videos are awesome I’m soon going to get started on all the material that you teach us but I do want to say your hair is bothering me bro I’m telling you there is a way to style your hair that’s going to give you an unrealistic style and you thought you could never have so if you give me a call I’ll tell you what it is I’ll even make a little short YouTube clip for you and I promise you with a little styling tips that I give you it’s going to make you look like you never thought you could just with a quick technique that takes less than one minute my number is 970-312-4994 I’m just a professional hairstylist but like I said less than one minute the technique that I’ll send you will make your hair look incredible
These guys are idiots
If you dont buy a house right, its wrong. Thats what this 8 min vid said boys, you guys are welcome.
Get property managermanagement for your rental property if you don't want to deal with the tenant keep calling you.
Do you rent out houses or sell?
I want to learn about this. I have done construction for 10 years and I just want to know learn about Real estate. I am so interested
Hey Chris, non of your links can be found.
Best way to start is wholesale real estate
I kind of get what you're saying, but you don't explain it very well. It seems like you go from one topic to another half way through a sentence and forget to finish talking about what you started with.
Do you speak German?
123 people disliked got hurt from real estate investing
Can you get Steven out your vids! Ruins them. Like if you agree
I'm noticing a lot of these people talk a lot and fast without really saying anything.
Should I buy a house and convert it into 2 apartments, I want to live in one and rent the other one
You should flip your shirts 😂💯
I made my first million from investing in bitcoin, this expert is Mr Tony Ivanov , we met at a trading conference and he accepted to trade for me, I've had no course to regret ever since
What is a flip???
Why do you have no hair on your arms do you shave your arms
So basically what we learned here is that we need to buy a house RIGHT to be successful at Real Estate..Gee Thanks.
Haha. Terrible advice. Pure fear mongering. Basically saying "don't buy any property".
I would like to learn because.I don't like making a mistake.
Bed bugs, candle wax down the drains, my dad buying a property that was clearly over valued and had to get a loan from the owner to make the deal happen.
like all the millionaire videos on you tube. yall still failed where to start at.
no 1 mentions school. no one says go buy the ca real estate exam book on audio books then go take the 3 required college courses.
What is a Flip?
I’m going to get my 700 sq foot basement renovated for a legal suite to rent out in Toronto
So I have a question; if i’m getting a mortgage and renting the rooms out to cover the cost of the payment and potential extra income, am I getting a 30 year mortgage, 15 year mortgage or a 5/1am?
So if you shouldn't get into a 30 year rental property how long should you get into a rental property?
So… 1:47 that sniff… then the other dude sniffs… Followed by what really looks like a bit of coke left in your stash… Just sayn, play hard?
I've noticed that with all of these guys on youtube talking about real estate, they claim "oh it's so difficult" yet then at the end, they promote their service that is supposed to eliminate all of the headaches. Sounds like snake oil to me.
Can I make ppl play less rent and let them pay for fixing things. Or take care of the place for cheaper rent?
How did this guy get over 300K subs? He talks in circles!! Don't flip! but flip just find someone with experience. don't buy a property for equity but we will help you buy for equity but "FAST" hahaha I'm done…
… I was going to put $20,000 on a 100,000 house with a 30 year mortgage with 4.5% interest and I was going to be a landlord … But if this is a bad idea what am I supposed to do
How it's goin to work with repairs when you can do it on your own? I have lot of knowledge and skill in all aspects that one house needs! Being over 15 years doing Heating , plumbing, electricity… all of the constructional works. I rly think that i am capable of nailing real estate and the desire to start is really burning in my belly. I somehow know that i can do it, and be sure that im gonna look at all of your videos, even if i need to watch it 10 times over and over again.
Thank you for the tips, appreciate your video!
You really need the right contractors, ones who have experience with city hall because city hall can be tough. We were held up for over a year getting a fire escape rebuild done.
I think they were sniffing some sort of white powder.
I want to save up to buy a house and sell it (my first time) what should I buy? What type of property?
Hey Kris, I could not download your book. The link doesn't exist.
I can get a house for 12k and rent it for 350 should i do it
the link takes ur info and delivers nothing
Are lease options still a viable business in Texas because you can only give the tenant 180 days to purchase?
Hire property management. The 10% is worth it. No need to deal with tenant calls.
Starts @1:56
you guys are saying a whole lot of nothing. Basically people the worst real estate investment you can make, is buying and not understanding your market and not doing your research.
informative stuff! keep this up. PS What To Do When Home Buyers are Unrealistic ? anybody ?
I had a landlord ask me for $200 every 2 weeks or he would try and throw me out
Thank you @KrisKrohn I just bought my first property, $380k (30k in equity) for a 8 bed 5 bath and leasing out the rooms to the private college 2 streets away for $1k a month per room. Mortgage with utilities is $3200 and I’m bringing in $7500 / month. Negotiated to get the seller to pay my closing cost and I put 15% down. Couldn’t have done it without the knowledge from your courses and videos.
So how do u buy property right?
Where are you gonna just find someone who has done 100 flips?????
These guys are funny!
Haha had tenants set a fridge on fire. Still worth it
You guys are spot on!!
What about investing in mortgage fractions? I see this an option if you can't afford a downpayment.
Hey Kris. I am 18 years old and I would like to get started in real estate but I have one question as to the approach I would like to take. How can I get into contact with you properly?
Real estate buying advice : Buy a property and then sell it for more than you purchased it for. 🙂
Lol pyramid 😂
Anyone that has done any real estate has had a bad experience. Hopefully its not too painful, you can move past it and learn from it. Study study study.
1:47
🎵She don’t mind, she don’t mind, she don’t mind…🎶
How's this deal? 37k 4 family 1950 per month rent. I find these all day
Get advice from someone who has done MORE than 100 flips… Ummm.. Yeah…
I love being a landlord but i am thorough when picking renters.
Worse video ever!
sounds like a used car salesman…
whats a flip