I have a client who first contacted me in 2011 wanting to buy a multi-family rental property in the Denver Metro area. He had $1M sitting in the bank and seemed to be an experienced real estate investor as he had owned and managed several rental properties for years. To this day he never has purchased a property. In fact, the only transaction I have ever helped him with was the sale of a property he already owned. And, he didn’t even roll the proceeds from that sale into another property!
Why? Because he found something wrong with every property I showed him, and he got trapped in his mind about the rising prices of those properties. For example, he thought one property had too many trees, and another was too far from his home. He worried about the maintenance, the location, and the price being too high (even though I could show clear ROI). As the market in Denver heated up and prices got higher, he couldn’t stomach paying more than what properties used to cost years prior. He thought surely, the market would top out and prices would come back down. Nothing I said would get him over the humps he created. He wanted a unicorn that didn’t exist: A property that didn’t need work, in a great location where he would get quality tenants, and at a cheap price. Ironically, the property I helped him sell was a well-maintained property, in a great location, that he owned outright. He already had what he wanted! He sold it because it was too much work and he didn’t feel like he could get good quality tenants. He could have easily updated the kitchens, and hired a property manager to do the work, including finding quality tenants.
As I got to know more about him, I learned that the properties he owned were inherited from his father and he grew up working on them. He never made the purchase decisions and hated doing the work. He wrestled in his own mind with even owning properties and always had it in his head that they were a pain in the butt. Yet, hiring a property manager was a waste of money in his opinion.
In the time I’ve known him, he could have easily tripled his net worth and cash flow while offloading the work to others. However, he wasn’t open to learning a new way, and, he couldn’t see how to take advantage of what he already had.
Investing in real estate carries some risk and involves some work. If you are struggling with pulling the trigger on a purchase, sale, 1031 exchange, etc., get to the root of what’s holding you back. It’s probably not really the trees in the yard, it’s a fear that you need to overcome or find a workaround for.
One thing I’ve learned about real estate is that while it does cycle up and down, the long-term trend is upward. Values go up over time. Rents go up over time. If you don’t over pay, don’t take on too much debt, and take a long-term approach, you will always do well. So get out of your head and go make it happen!
Brad Uhlig is an investment property Broker/Owner with West Peak Properties, a full-service brokerage company specializing in investment properties in the Denver Metro area. The brokers at West Peak Properties have over 40 years of combined experience with 100’s of transactions closed. Their mission is to help investors build their portfolio, manage it, exchange and sell when the time is right, and live a better life through the financial freedom real estate investing allows. Contact Them Today!