Before you make a big purchase, do you get good advice before buying or just go with your gut and wing it?
Proverbs 15:22 says, “plans fail for lack of counsel, but with many advisers they succeed.” Having compelling instincts and being willing and able to pull the trigger are admirable qualities. But without good advice before buying ( at least anything big), you could end up in a hole or buried in a money pit.
Before my brother and I actually embarked on the house flipping and real estate investing journey, advice fell like rain. Everyone we talked to had an opinion. Some even offered their advice. More often than not, dark clouds loomed. There had to be a way to weed through it all. Were the naysayers right? Were we just dreaming. Was this a foolish experiment in futility? And when we found those who liked our plan, were we just picking out people who told us what we wanted to hear? A daunting challenge faced us.
Eventually, we did manage to find a way through the maze. We found good advice through many advisors! Through the many advisors a pattern emerged. Most of the naysayers had one thing in common. They had no background in real estate investing, much less house flipping. Those who saw an opportunity before us had real estate investing in their background. Before we knew it, truly good advise became much easier to discern.
LESSON 1
Learn from those who have experience.
Genuine experience will yield positive encouragement AND cautionary warnings. Why reinvent the wheel. Seek out those inventors. Those who invented it can give a valuable leg up and a jump start ahead.
LESSON 2
Listen. Listen.
Actually listening is your number one tool. It an admission that someone else may have some helpful answers. But they can only be heard if first you listen. It takes a little humility at times. The ability to listen means balancing knowing what you know and what you don’t.
When we began, that was very apparent to us. We didn’t have a clue. We were in over our heads. For a time we hired a guy to be available to answer our bigger questions. And after years of this work, we are still asking questions! Like life, real estate investing requires constant learning.
LESSON 3
Remember what you’ve been taught.
One of the best pieces of advice we received was ” you make your money at the buy”. Consequently, this one sentence has saved us thousands of dollars over the years. We heard it from a guy who already was deep into real estate.
My brother and I both can get excited about a property in the discovery phase. As a result, when a new project looms, there’s a certain fire to buy the house and get moving. Whenever we look over a property, it is easy for us to come up with ideas for revovation and wrapped up in the future. And if we aren’t careful to remember what we were taught, we could jump too soon. Personally, I can say first hand that this is a strong temptation!
“You make your money at the buy” means this: don’t get wrapped up in the excitement of a new start and pay too much. Any renovation by definition requires a close eye on the budget. Paying too much at the beginning could easily put your budget into a hole. Therefore you are left playing ‘catch up” at best or at worst a money losing venture.
As a result, we have heeded that advice over the years. And it is very good advice. Advice that stems from experience, is heard and remembered is the kind of advice that can impact your life and sometimes your bottom line.