From General

Success in Real Estate

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.

 

Because they said so

They said this was the best thing.
They said we should go here.
They told us this was the best place to live.
They said fevers are bad.

How often have you wondered who ‘they’ is?

I learned yesterday that since 1955 Tylenol invented the concept that fevers are bad and you need to treat them fast. And Tylenol will do the trick. In reality, fevers are your body kicking into action to heal itself. And fevers of 103 or 104 degrees – considered extremely high and certainly not fun – are not bad for you. Tylenol told you they were and it became the truth. And so you went to the doctor to get help. And doctors had to jump on the bandwagon. Parents everywhere panic when their little ones get a fever.

There are many ‘theys’ telling you what to do. The reality is only you know what is right for you. What ‘they’ tell you is one data point often worth considering. Often not. The best is relative. Your mileage will vary.

We frequently look for someone else to tell us what’s right because it’s easier. We don’t want to get it wrong. Yet oftentimes getting it wrong is how we grow assuming it’s not a life threatening decision. Which most are not.

Stop and smell the Turkey

Today is the day we write pithy words of thanks and gratitude. Right before the mad dash that is the holiday season.

I, too, owe much gratitude to those around me for their kindness. Their time. And the opportunities I have each day. It’s remarkable what each of us have even when we’re clamoring for more. I have to remind myself of that too.

It’s no secret this has been a weird and trying year on so many fronts. For this day, though, a simple thank you. A chance to slow down and savor the moment. To breathe in the warm scents of a juicy, freshly roasted Turkey. Happy Thanksgiving all.

So how was your year?

Shall I acknowledge it’s been nearly a year since I’ve posted here? It’s pretty obvious and yet I feel I need to do so for you, dear reader.

Why is it that at the end of each year we take that step back to evaluate what we did and didn’t do over the year? Goals set and not achieved. Or set and actually exceeded?

It isn’t that I haven’t posted ANYTHING online for the year. Rather, I’ve kept up my daily photo and a few words about the day over at Mundaily. Using my trusted Fuji X100f each day, I’ve flexed my visual muscles and the workflow of downloading, editing and processing an image for each day. Some days have been visually richer than others. Some I just need to check the image off the list.

As I usually do each year, I think a lot about what I want to do when I grow up. Seems I am in a perpetual stage of growing up! It’s the journey really and embracing that is what I enjoy. It’s about possibility. It’s about engagement. And I’ve realized more than ever, it’s about being intentional.

I won’t make promises that I will blog daily, weekly or on any schedule yet. The proof will be in the pudding so to speak. Yet I am eager to flex my writing muscles to improve. To share what’s going on. To share the possibility I feel in spite of all we read each day.

The key to happiness

Many have researched the elusive pursuit of happiness. A couple of the more notable include Martin Seligman and Gretchen Rubin. Our consumer culture tells us we’ll be happy if we just buy more stuff and more exclusive tonics. Rinse and repeat.

It’s much simpler than that. You can find happiness by focusing on what makes you unhappy. You already know what makes you unhappy. By removing these things you’ll find yourself much happier in short order. It’s a subtractive process.

Before you think I’m a genius for the solution, I must share that this was one of the ‘oh duh’ moments that came from reading Nassim Taleb’s provocative book, Antifragile. He uses the concept of ‘via negativa’ versus ‘via positiva’ to solve our most perplexing problems.

Another key is to avoid toxic people. We know who these types are. Seek those having a positive outlook. Build friendships with those that are happy for your success rather than envious or competitive. It’s less work for you to remain positive and happy when you can be yourself. Immersed in negativity, it’s easy to get sucked in.

At work it’s a little harder. Sometimes we have to interact with toxic colleagues. Especially in workplaces where there’s an absence of the No Asshole Rule. In these cases, you can try to limit exposure and go in ‘feet first’ as one person does in her work place. This refers to being ejected from your kayak in the rapids where you want to stay feet first to avoid bonking your head on the rocks.

Most of us have too much complexity in our lives. And too much stuff. Simplifying through subtraction is relatively easy to do. Finding happiness by focusing on unhappiness is a small piece of Antifragile. It’s one of those books that changes your worldview.

We like the underdogs

Apple was the cool, quirky company who could. The one many derided as toys and for those wanting something special. And then they got big.

Starbucks was the cool third place you’d go to connect with friends and associates. Where you’d hang out and write witty prose or dream up your next adventure. And then they got big.

Apple, especially with the notion of marketing a $10,000 watch that’ll be obsolete in a year is reaching the tipping point. They clearly strike me as a greedy company that cares little for the little guy as the largest, most profitable company around. But we still love their products. There isn’t anything better. Yet.

Same with Starbucks. I now brew my own coffee at work using an Aero press. Starbucks has lost that specialness. It’s now just a commoditized transaction. In and out. Sure, they’re nice places to meet someone for a conversation. Especially for business. But it’s not somewhere I care to go in my spare time or when I want a good experience. The coffee is just not that good anymore. I can do better myself.

I’ll confess that it took me a few tries to get the process down so that it was easy, but now that I have it dialed, I love the quality of coffee via Aero Press. Bon Appetit was right when they cited it as one of the best for the road. I want Starbucks to become cool again; they’ve made huge, generally positive impact on the world. I actually think that they have a lot of people who care, but it gets really hard at scale.

When you’re everywhere – and big – and ridiculously profitable, you lose the underachiever status that makes us want to root for you. No longer do we care much about your success. We like the struggle. We like the ones who’ve not be discovered by the masses.

Once big, you’re not so cool any more.

At what point do you reach that? In business, if you’re not growing, you’re dying. You always have to reinvent yourself. Release new products and new things. Because – especially with technology – change happens and people get bored. We always want the new shiny object even when they absolutely don’t need it. We really don’t.

And if you’re not growing in size and profits, someone else will overtake you.. You’ll be replaced. It’s a conundrum. How much processing power do we really need? How many different types of Lattes, Frappucinos and Refreshers can we consume? It becomes noise.

I don’t have an answer here. Just observations. Stay fresh Keep delighting those you serve. Pay attention to the little things even when you’re big. Few companies do and that makes it unexpected. But remember that we generally root for the underdog.

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