Recent real estate investment guru online advice not much better than the old garbage

Years ago, I used to pay attention to what other real estate gurus were advocating. It got so repetitive I found it to be a waste of my time to pay any attention to them.

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I was just reviewing my marketing on the occasion of coming out with my first new real estate book in a while and took a look at what comes up today when you search for real estate investment advice. I used to be near the top of all such searches. My natural writing style was good SEO. The original search engines were designed to find the most-linked-to information.

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Now, I do not know what Google et al. look for. In real estate investment it looks like the search engines favor advertisers or results that produce results for advertisers. For example, Fidelity type companies would have you believe they’re all you need on any investment type. They really do not like the real estate asset class. They will sell you some REIT stock.

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But they apparently have big ad budgets and like the word “investment” so it appears the search companies now cater to the big-budget advertisers in each search term. Real estate investment at it is used today is mainly about homes. But Realtors do not advertise to sell homes to investors. They most sell to owner occupants.

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So searchers may be looking for the best advice on how to buy homes and the search engines used to try to get you whatever you wanted. Now they try to deliver your eyeballs to whomever pays the most per click for them.

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What rubbish!

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Some examples:

A site called Roofstock offered 23 tips the first of which was 1. “Find rental properties in emerging neighborhoods.”

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I think they mean those that are about to appreciate by extraordinary amounts. Great if you can do it but how? Define “emerging.” They do not even try. It is a BS term. In investment, it refers to foreign markets—basically a euphemism for what Trump called s***hole countries and what were called “lesser developed” countries when I was in grad school and “underdeveloped” countries when I was in high school. Applying the term to local US real estate markets does not change the fact that it is vague BS spin.

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Reminds me of Will Rogers observation that buying stocks was easy. “The secret to the stock market is to buy a stock that's going to go up in price. If it doesn't go up, don't buy it.” That is about as useful as Roofstock’s top tip.

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My version of that? It is a timing strategy. It retrospect, it looks so easy to buy stocks and real estate before they jumped up in price. In fact, timing strategies are so well known to be worthless that the web articles article on market timing generally treat it as a scam or mirage—impossible to actually do prospectively.

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I recommend buying either bargain prices or property with unrealized potential that can be realized by making cost-effective changes. I wrote four books about those two strategies. I wrote NO books about timing markets. I could write one about all the guys who lost their asses TRYING to do that.
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Here are those four books:
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• https://www.johntreed.com/collections/real-estate-investment/products/ho-to-buy-real-estate-for-at-least-20-below-market-value-volume-1-by-john-t-reed

• https://www.johntreed.com/collections/real-estate-investment/products/how-to-buy-real-estate-for-at-least-20-below-market-value-volume-2-2nd-edition-by-john-t-reed

• https://www.johntreed.com/collections/real-estate-investment/products/fixers

• https://www.johntreed.com/collections/real-estate-investment/products/how-to-increase-the-value-of-real-estate-2nd-edition-by-john-t-reed

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Here’s another example. This is an old chestnut that is still around. To be a successful real estate investor, they say, you need an ALL-STAR TEAM AROUND YOU: your Realtor®, your lawyer, your CPA, your mortgage lender, your building inspector, your architect.

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I never had such a team. You do not need such. It would also be very expensive. It is what was called at Harvard Business School “Managing from the 50th floor when you only have a one-story building.” For the average real estate investor, it would be a ridiculous affectation and expense.

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When I was most active investing in South Jersey early in my career, I came to have the following whom I used regularly: painter, roofer, tile man, lawn care guy, snow plow guy, plumber, electrician, car mechanic. I did NOT have a regular Realtor® (I was my own Realtor®), lawyer (ditto), CPA (ditto), building inspector (ditto), lender (you go with the low bidder each time), architect (Ha! very funny). I wanted, but never found a regular carpenter or mason or oil man, etc.

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The two real reasons people spout this “you need a team” BS are 1. if you understand real estate investment, you ought to be scared s***less at its dangers and complexity. The “you need a team” shtick  is a BS guru trick to get to to lower your guard. Nothing to be afraid of. Your team will protect you from all bad things. The hell they will. You need to deal with all the dangers and complexity yourself. It’s not easy, but it’s doable.

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2. The other real reason is those professions need the fees you pay them and your becoming a regular customer who does not make them compete for your business is good for them. They push the “team” need idea for their own selfish purposes.

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The truth about such a team: You cannot afford such a team. Such a team takes years in the field to assemble. You cannot rely so heavily on such a team. You are your own protector. To be the captain or user of such a team, you have to be a skilled, experienced generalist who is extremely familiar with what each team member does and how the team fits and works together. Not every town has a great everything when it comes to professionals. And where they DO have some of the great professionals, for one reason or another, that person may not want to work for you. For example, they may already work for a competitor.

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The Stessa website says the #1 tip is to have a strategy before you start.

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Uh, there is a kernal of truth to that. But here is the correct version: You cannot know your strategy when you start. Your actual strategy will end up being an amalgam of what you are good at, what you like, what your local market offers, the real estate economy when you start, and the like.

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Investing strategy is like a football coach’s game plan or a general’s battle plan. It is a tentative theory. Mine was to imitate Bill Nickerson’s buy run-down properties, fix them, and trade up and do it again book.

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Did it work? No. I ended up doing a modified version of find waiting-list buildings during high inflation, buy them, raise the rents to market value, trade up and do it again. Did that work? For a while, then the S&L Debacle blew it up.

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Also, as I say in my four books on how to make deliberate profits, no matter what strategy you focus on, deals are not so clean. As you proceed, you find that almost every deal that fits your strategy also have some other opportunities to make more money, money you would be leaving on the table if you did not take advantage.

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My four deliberate profit books have about 60 some specific real estate investment business models like foreclosures, partial interests, moving buildings, zoning changes, and on and on. I urge readers to focus on two or three strategies, but to also become familiar with all the others by reading my books, then, when each individual deal also presents one of those other opportunities, you will recognize it and cash in on it.

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For example, I bought the Greenbriar Apartments in Corsicana, TX because they had a waiting list. I raised the rents, and thereby the building value over 30%. But I also noticed load-factor mistakes. Load factor is building space or area that is not fully utilized. In that building, I turned a store room into the second bedroom of a one-bedroom apartment, turned another storeroom into an efficiency apartment, created two outdoor private patios, and two-under-stairway storage closets that I rented to tenants.

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Real estate investing is a complex business, but doable.