Go hard on homes or just go home?

A few months ago, I got an email from a 26-year old real estate investor. She wanted to buy another property and she was also scared of stretching herself too thin or getting in over her head. She wanted my advice. And at the end of the email, she asked me this:

What do you do when you're scared of failure?

I immediately typed a reply.

What do I do when I’m scared of failure? I believe in the numbers, not my fear. Because isn’t it always that simple? You run the numbers, evaluate the deal and if it makes sense, it makes sense. Of course I’m terrified, but if the numbers make sense, I pick up the phone and make the call.

But I didn’t send the email. For months. Because it’s also not that simple. And the truth is something more like this:

What do I do when I’m scared of failure? I don’t know. I’m scared of failure right now. I want to buy more properties and I doubt myself and I stress over my equity-to-debt ratio. I doubt my ability to find good deals. Sometimes I think I just want to cash out and put it all in index funds. I’m thinking of remodeling a unit, and I’m not sure. I’m thinking of doing a 1031 exchange on one of the houses, and I’m not sure. And I’m so fucking over getting phone calls about washing machines. 


Here’s what I wrote her*: 

  • You will always be trying to balance between your equity and your debt. The balance will never be perfect, but it will have moments of almost-perfection. Keep trying.

  • Every time your life changes, your real estate choices will change. You’ll hire property managers. You’ll decide to invest long-distance. You’ll decide you only want Class A neighborhoods. You’ll realize you want to be mortgage free. You’ll start only buying notes. And you’ll also un-decide all of those things too.That’s the nature of starting young / childless / single, so get used to it.

  • I suck at giving real estate advice. Because I’ve been luckier than most. And I still have my own risk adversity. And my own struggles with time management. My advice is based on my success which is based on a real estate market I don’t control. And this is true for everyone who gives you real estate advice. Nobody has the answers. And if they say they do, don’t give them (LBH, him) your credit card info.

Real estate is by far the most popular topic that I get emails about. And I love answering them. Why? Because real estate is so much simpler than sticky hairy things like sharing money with a spouse and how to not lend money to your friends and prenups and all that...so if you have a question about real estate, please do me a favor and email me :)