Years ago I had a dream of being a real estate investor. I tried buying and flipping houses looking at home after prospective home, estimating repairs, timelines, financing and net payout. I made numerous offers on viable homes and didn’t secure a single one. Someone always beat me out. Eventually I gave up when it didn’t seem viable.

A few years after that, bought a second home in Sunriver, Oregon, realizing a dream. The most inexpensive home in a great neighborhood. Except it was 2007 right before the crash. 10 years later, sold it for less than purchase price. On the one hand it was a great getaway. On the other, my timing was poor and it clearly was not a good investment. Could have rented really nice homes for less than ‘owning’ this one. Which required maintenance, repairs, oversight. And the opportunity cost was in part lost exotic vacations. Sunriver, though, is still a magical place.

The lesson is that investing is all about timing. Whether the markets or real estate. And no one has a crystal ball. Perhaps I should have seen the signs that we were at the top of the market. I was worried about being priced out completely.

When I hear ads to attend seminars for ‘house flipping systems’ and ‘building teams to make money in your spare time’ I am cynical. Especially in the Portland market which has low inventory and high competition for properties, particularly at the lower end. There is money to be made in selling the system and the dream. Realizing the dream after purchase is harder. Doable, but harder.


Because it takes fortitude, tenacity, grit and time. You need to identify the right product, buy at the right price and sell at the right price in the right time to clear a net profit. It’s that way with any business proposition.


It’s human nature to want overnight success. For it to be easy. But if it were, all of us would be tremendously successful. Each of us has our measure of what success looks like. Not all of it is monetary although that certainly opens up many doors.

Key is defining what it is and going after it with gusto and patience. Real estate is no exception. Looking at properties now, I am assessing the cost for renovation and how long it’ll take to recover the costs even if it’s my primary residence. Most all existing homes need updating in a few years. They need maintenance to stay in top shape. I’ve heard recently that lumber prices have skyrocketed because of new tariffs on Canadian lumber. Labor, too has increased with demand and it’s hard to get remodeling projects done affordably or in a timely manner. At least here in Portland.

The New York Times has a calculator for estimating the cost benefits of renting vs. owning based on many factors which is illuminating if you’ve never done the math. And the math doesn’t account for the psychological benefits of owning your own home. Of being able to make it exactly the space you want.

There are few signs that Portland isn’t going to decline anytime soon like some areas of the country did in 2008, yet we don’t know for certain. And if you’re investing in real estate to achieve a return in the short or long term, the math is important. But timing is even more important. And all of this takes grit and a certain tolerance for risk. There isn’t an easy risk-free path to success.

 

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