“Only when the tide goes out do you discover who’s been swimming naked!”
Hey it’s Cody Sperber back again and I have a question for you. ”Fast money spends fast.” You ever notice that?
Think of many of the people you saw “real estate investing” during the run up. Yes, they were making fast money, sometimes huge chunks of money. And because making the money was easy, they also thought it was limitless. They were spending it as fast as it came in – new car, trips with the requisite picture of them posing in front of a private jet, buying properties with financing that made no sense in any market. When the bust hit, these people were wiped out. And not just wiped down to zero. They were wiped down to below zero. Some will never recover financially.
Many real estate investors, in a desperate effort to make a lot of money fast, take risks that eventually (sometimes quickly) knock them out of the game. Real estate is a long term investment. Even if you’re flipping contracts, you want to create a business that you will be able to reap profits from for years, not for one quick season.
One of my early mentors was the late Jack Miller. Jack was an “old-school” real estate investor. He bought and held, making his money on cash flow and paying off his properties over time. He worked to free and clear his properties and created a real estate portfolio that set him and his family up for life.
Jack was also notoriously cheap. After a seminar, he’d host a “cheap wine party” for his attendees and he delivered as advertised. Box wine was the norm. Jack didn’t drive flashy cars or wear flashy clothes. He put his money where it would give him a good return on his investment.