People don't understand me!

[Golfman530]

Hello everyone!

I guess I am having a hard time right now because people such as my family and friends do not understand me right now and they think that I am totally clueless.

My fiance and I are currently both seniors in college and we really want to start our own real estate investment firm. We both realize that our formal education will help us very little in accomplishing this goal and we are both feeling that college for us is kind of a waste of time and money. (If you are wondering why we are in school, it is because we didn't realize what our dreams and goals were until this past summer and we only had one year left so we figured why not just finish since our parents invested in our education.)

We both feel as if nobody understand us. They don't understand why we don't want to look for a tradition job after graduation. They don't understand how real estate works and they think we are absolutely insane!

I have tried explaining to everyone that we are doing this right by learning as much as we possibly can about real estate by reading, joining investment clubs, and getting a successful mentor who has already done what we want to do.

They still don't understand and they are negative and feel like this is just a phase that we will get over.

We have gotten to the point where we can't and won't even talk about our business and being entrepreneurs because it just gets shot down by them.

We are just really struggling because of this and the fact that it is very hard to focus on school work because it is not even what we want to do anymore.

Does anyone have any suggestions or thoughts that might encourage and help us?

I am sure that many successful entrepreneurs had to go through this at some point in their lives.

Thanks so much!

[KristineS]

First, I will say this - if you're this close to graduating, finish your degrees. College can teach you to think critically and, like it or not, there are still portions of our society that equate college degree with knowledgeable and employable. It can't hurt anything and it could help.

As for the nobody understands you thing, you're probably right, they don't. Not everyone is cut out to be an entrepreneur or to understand that mindset. A lot of the people who are telling you it's a phase or too risky or whatever they're saying and saying it because they care and want to protect you from what they see as the potential for catastrophic failure. The best thing you can do is realize that they're saying what they're saying because they care about you and then let it slide off your backs.

If you're done your homework, if you understand what the potential risks and rewards are of what you want to attempt and are sure you can handle either success or failure, whatever comes, then you have to believe in yourselves and make the leap. If you're truly sure this is what you want and you believe you have the skills and talents necessary than you have to try. There's nothing worse than looking back and wishing you'd tried something and realizing it's now too late.

[nealrm]

First, I would like to commend you on your desire to become entrepreneurs. Few have the bravery to take that route.

By real estate investing are you talking rentals, flipping homes, or buy property today and selling later for a profit?

People can and do make a great deal of money on all three. They also loose a great deal of money. The goal is to be in the first group and not the second.

A couple of warning about real estate. There is a great number of "wealthy" people investing in real estate. These people are not really "wealthy", they are in debt past their eyeballs. They tend to be shooting stars, a short term bright streak as they burn themselves out financially. They will live in big houses, drive fancy car and tell you about the numerous properties they own. In truth, the bank owns everything. I have seen them come and go more often then I can count. Find the mentor that has been doing this for 25 years or more and live a more down to earth life.

Also, there are hundreds of books about how to make easy money on real estate. Any book that states "Anyone can do it", "Make millions", "without investing your one money", "No risk" or anything similar is not worth reading. In general those books are only good in make profits for the writer, bankruptcy lawyers and as starter fuel in fireplaces. Stay clear of any advise they offer.

Since you are still in college, I am assuming you have not done a great deal real estate transactions. So instead of jumping into the fire, try learning more about real estate first hand. Become a Realtor. Good real estate agents can make a lot of money and it will help you to both better understand the market and those key player in the market. You will also gain first hand experience on the value of real estate properties, trends and the like.

Also, the Dave Ramsey radio talks about real estate from time to time. Listen to the show.

[Golfman530]

There's nothing worse than looking back and wishing you'd tried something and realizing it's now too late.

I completely agree and thanks for sharing that. I also agree that college is still important and that I will definitely finish. It is just very hard at times to write papers and do assignments knowing that much of the information will be forgotten and not used.

Another thing that is difficult is that a lot of my fiance's family struggle with money and they live paycheck to paycheck barely scraping by. It almost feels as if they are embarrassed or ashamed that we wouldn't have to struggle financially and they would be. I have no idea why they feel this way but it is like they feel, "We were born to struggle and the government and the world is just out to get us and we will never have anything." It is hard dealing with people like this.

My family on the other hand is different because many of them look at business and making a lot of money as "evil" and the only way to be rich is to cheat people. They don't struggle financially but they just live typical middle class lives working for the man and thus don't understand the way we feel.

The two of us are basically stuck in the middle of these two pulls. We are trying our very best to ALWAYS stay positive and not let any of this get to us but it can be hard at times.


By real estate investing are you talking rentals, flipping homes, or buy property today and selling later for a profit?


Our focus is on holding multi-family properties in emerging markets throughout the U.S. and then after a period of time selling and moving on to the next emerging market and repeating the process. This focus allows for great monthly cashflow (approximately $100-$300 a door) and also great capital appreciation.

You make a good point about many of the so called "gurus" out there selling their stuff. The worst ones are the ones on late night infomercials telling you how you can be a multi-millionaire with no money in one year! Talk about a scam! :D

I am in the process of getting a mentor and this mentor is through a large multi-family investing company who owns thousands and thousands of units across the country who has been doing it for years.

I know getting past the negative people is just part of the entrepreneurial process but I admit, it is harder than I thought it would be!

[phanio]

So what if they don't understand you? I don't understand you either but is that going to change your mind? If your folks invested in your education, I can understand that they want something to come out of it. So, I understand their point. You want to start your own business - I understand that. What I don't understand is how you are going to finance your business? Having jobs in your field for a couple of years (and a little discipline with your money) could go a long way to getting your started. Real estate is not the best market right now. Far too many people think that they can just jump in, buy some property and either flip it or rent it out. But, it is not that easy and even harder to get someone (bank or investor) to back you.
Why not leverage your education into jobs where you can save some money and do it the right way? Either save money that you can live off while your business is being started or money to fund your business (or do you think your folks should pay for that as well without any input?) Or, go work for someone in the industry and gain some experience first - reading books and all that is great and all - but, nothing better then hands on experience!

[Freelancier]

My fiance and I are currently both seniors in college and we really want to start our own real estate investment firm. We both realize that our formal education will help us very little in accomplishing this goal and we are both feeling that college for us is kind of a waste of time and money.

To be an investment firm, you have to have money. Where is that coming from?

Do you want to get bank loans to augment your own money? They won't give it to you unless you have a track record or unless you can show you can pay off the loans without help. They sure don't want the property you buy, they want the money back. And if you get the money from investors, they're going to also want to see how you plan to make a profit and that's more than just describing your dream. You gotta get the numbers right. This is where you are likely in the right place: colleges have business departments that just love to help new businesses get started.

If this is really what you want to do, you might consider taking a few years and really learning the business from the inside by working for a REIT with the asset mix you're looking to mimic. That's not being "negative", just understanding that you probably don't know as much as you need to know to do this right and succeed the first time out.

[Golfman530]

Thanks for your posts.

I agree that hands on experience is a great learning tool.

However, some of the greatest real estate investors in history started with almost no money at all, little experience, and no track record!

My fiancé and I have already figured how much money we need to start and we also have a plan as far as an income to live off of at the very beginning.

This post wasn’t directed at how to start in real estate because with our mentors help (He started many years ago with $800 to his name and with hard work and dedication turned it into a $250 million portfolio), we already know how to begin. It was directed more at how to deal with the negative people that we have in our lives who are trying to stop us.

I don’t want to come across as we already know everything because trust me, I know we have a lot to learn along the way but we have an understanding of how real estate works and how to begin with limited resources.

[MostHeather]

I'm sorry to hear that your family is reacting negatively to your ambitions. Often times your family members can be the biggest 'boo birds' if they don't understand exactly what you're trying to do.

Lots of us have 'been there, done that.'

That being said, if you put your mind to a goal and have a strategy to achieve it don't let them stop you. I wouldn't recommend dropping out of college in your senior year because graduation day will be here before you know it, but don't give up on your dream business, either.

If you're looking for inspiration, go to YouTube and do a search for "Napoleon Hill." There is lots of archived footage and his teachings are sound and helpful when you might be second guessing yourself. He doesn't teach about real estate investing, but he speaks about other core topics that are helpful..

[Freelancier]

He started many years ago with $800 to his name and with hard work and dedication turned it into a $250 million portfolio

Umm... you know that 50 years ago when I was born, we lived in a 3 BR house that my dad bought for $15,000? Think about $800 in relation to that vs. $800 in relation to the price of housing now.

As for what to do with your relatives who don't believe in your dream the way you do: you don't do anything. It took my parents 20 years to stop asking me if I needed money after I started my business and became very successful. They worry about you. You thank them for their concern and their prayers and you do what you think is right, because in the end it's your life and you have to choose the path to wander... unless you expect to move home after you fail, then you might want to also suck up to them. :)

[Harold Mansfield]

I agree. Finish your degrees. You'll be very happy that you did. The only thing worse than not going to college, is going and not finishing.
I too come from a "get a good job, with benefits and work it until you retire" family. And most of my friends are that way too. Don't worry about them, they'll never get it.

I would suggest working at a Real Estate firm first, maybe for a year, and getting some real world experience before going out on your own. A steady paycheck for a while ain't bad either. May as well make a little money to at least set up your office and throw a couple grand in the bank..cause when you do go it alone, you will be broke.

I'd also be careful with that

some of the greatest real estate investors in history started with almost no money at all, little experience, and no track record!

Most people who tell that story are using it as a sales pitch and fail to mention a connection they may have had that helped them along the way, or a bit of luck that fell their way. Also, what worked 20 years ago (or even 6 years ago) won't even get close to flying today. You'll never hear the words "sub prime " ever again or "stated income", so that's 2 'no money down' loopholes that were available then, that are gone forever. There are many more.

NO ONE shares all of thier money making methods. And those that claim they are, have either already exploited the system for all it's worth, or whatever method they used is now completely saturated. The web is the same way. I repeat, NO ONE gives a way an undiscovered method that is still making money.

For instance, Donald Trump tries to sell that BS all of the time, but he fails to mention that his dad not only paid for his education so he started with NO DEBT. But gave him his first building in New York, and then bailed him out when he screwed it up.

A lot of the Real Estate "gurus" that you've seen on TV are in jail, under indictment or under investigation for ripping people off. Tom Vuu ("If I can make a million, you can too!"), Wade Cook and his "Real Estate Money Machine", Armando Montelongo from A and E's "Flip this House", Russell Dalbey "winning the Cash Flow Business", Mark Bosworth, William J. McCorkle, and the list goes on. All of that "No money down" crap is mostly BS. The big money is in selling the dream to people. People are also starting to see through Robert Kiyosaki "Rich Dad Poor Dad" as well.

Not trying to discourage you, I just want you to be realistic. Work in the industry first and see what really goes on. I don't care what business it is, gong into it with no money, and no experience is 2 strikes and you only get 3 before you have to regroup and start all over again.

[huggytree]

isnt the real-estate market in horrible shape right now?...people are getting out not IN

it may turn around next spring or maybe not for 4-10 more years....no one knows

you'd throw away graduating to follow your dreams into a field thats on life support

graduate from College, look for a normal job and wait for the real estate market to recover somewhat and jump in then....i dont doubt there will be some good opportunities when things recover, but right now i dont know if you could pick a worse sector to get into....i think you'd be doomed to fail

[Golfman530]

I am definitely going to finish my degree. I was just saying that at times it is hard to focus because I feel as if most of the stuff that I am learning is not even going to help me in my real life.

I can also see Harold how working in a real estate firm could help by getting hands on experience without worrying about my future being on the line.

As far as the financial side and having limited resources starting out, somebody who has never learned about or experienced real estate investing before does have a very hard time understanding it. I know I did before I reached out for help from experienced investors who have done it in the past.

So for example, Freelancier shows that he has never learned or experienced anything in real estate investing by his above stated comments.


Umm... you know that 50 years ago when I was born, we lived in a 3 BR house that my dad bought for $15,000? Think about $800 in relation to that vs. $800 in relation to the price of housing now.



unless you expect to move home after you fail, then you might want to also suck up to them.

I fully realize that many of the so called "gurus' are in jail and are con artists just trying to sell their products. BUT I am learning from everyday, average people who have started their own investing businesses with very little money of their own and are VERY SUCCESSFUL. They don't call themselves "gurus" and they aren't trying to sell anything because they don't have any products to sell! They are just average people who learned from others and put in the hard work that it takes and improved their lives.

I am glad that the subject of Trump came up also because if you really study his investment strategies and how he finances deals, you realize that he buys multi-million dolar properties with very little of his own money. Whether you love him or hate him you really can't argue with the success that he has had doing that. Also what gets failed to be mentioned is that yes, his father originally started the business before Donald BUT he started it from scratch without millions of dollars in his back pocket.

The main problem here is that there are a small minority of real estate investors who get recognition and fame from being on TV trying to sell their products and then when they fail and go to jail, the masses laugh and say, "See Real Estate doesn't work!" The problem is that the rest of the investors who make up the majority are misunderstood and people think they are cheating as well which isn't the case at all.

To wrap this all up, I am not trying to argue with anyone or get anyone angry it is just that real estate is a misunderstood business. People who don't understand how real estate investing works do not see it. (I know because before I learned anything about it I didn't understand it either!) When I really want to talk RE in a forum setting, I know better than to go to this one because it is not RE specific. I started this post today to see if anyone had advice on how to get over negative family and friends while starting a business. I wanted to learn from your experiences and hear your stories of how you managed to deal with people like this, not get dismissed as another real estate want to be who doesn't know anything.

However, thanks a lot to those who truly wanted to help me with the real question that I had :)

[Harold Mansfield]

I certainly don't think that there's anything illegitimate about Real Estate investing. Some have given it a bad name, just like "make money online" scams.
Forgive me if I don't think Donald Trump is the best example. You say "he built it on his own" but he didn't. How can being given your first building in New York, having your education paid for, getting your first few loans from a friend of your father's, and inheriting money be considered "building it on your own"?
Dude had a lot of breaks that normal people would have never gotten.

Sure, at this point he has a track record and has built a relationship with investors and bankers willing to back him. But, if you study is entire story, he filed bankruptcy so many times that no one was willing to help him save his casinos in Atlantic City. Everything was leveraged or over valued. It was a personal relationship that got him the help. Not any savvy business skills or paper jockeying.

Never underestimate who these guys know. Trump was born knowing the right people and went to school with their children who are now the right people. Those are doors that will take regular people years to open, if ever. At that level, money is still a who you know world. You aren't getting those kinds of connectrions and trust coming off the street.

Like I said, definitely go for it. But, all I'm saying is when you study these guys, you don't get the real story. You get the "American Dream" story.
If you have mentors showing you the ropes, I'd be more likely to trust them than I would these popular characters who all did it from the gutter, with no help from anyone, in a blinding snow storm. Uphill. Both ways. Learning from those that are doing and willing to take you under their wing, is the way to go.

[Golfman530]

I agree, Trump isn’t the best example in the world to use. I do believe he is an excellent RE investor and developer even though he has had some failures. For a lot of people he is the only RE investor that they even know of so I guess that is why he gets used so often. As far as Trump is concerned, I guess the best example as far as starting RE investing from scratch would be his father.

One of the biggest things that I have found that people don’t understand about RE investing, especially when I tell them about mentors and coaches, is that they believe all those guys are scam artists. Sure, like you mentioned there are some out there who are nothing but cons but people use these wide, sweeping stereotypes to classify them all and it is just not accurate. I guess people don’t give RE mentors and coaches a fair shot because their view towards them going into the situation is so skewed by the bad ones that are out there.

[Harold Mansfield]

One of the biggest things that I have found that people don’t understand about RE investing, especially when I tell them about mentors and coaches, is that they believe all those guys are scam artists. Sure, like you mentioned there are some out there who are nothing but cons but people use these wide, sweeping stereotypes to classify them all and it is just not accurate. I guess people don’t give RE mentors and coaches a fair shot because their view towards them going into the situation is so skewed by the bad ones that are out there.
You will find that there are a few of us that understand EXACTLY what you are talking about. The web is the same way. Plenty of scammers selling people a dream based on their ignorance that anything on the web is easy money. I vaguely remember the same thing happening when Day Trading was all the rage.

[nealrm]

First I am in real estate, so don't say that I don't know what I am talking about. I spend a lot time dealing with real estate. First this I will tell you is not to build your business on sand. Make sure that the cash flow is in place before moving on to the next investment. I have seen the same thing over and over and over nad over again. A investor comes in with funding and stretches it to the limit. They have $250 million in properties. Then something happens to the cash flow, and the dominoes start to tumble. One day they have $250 million the next they are watch their house being sold for 1/5 of what they paid for it. That mentor of yours took many years to get where he is, don't try to do it 5 or 10.

[Golfman530]

First I am in real estate, so don't say that I don't know what I am talking about. I spend a lot time dealing with real estate. First this I will tell you is not to build your business on sand. Make sure that the cash flow is in place before moving on to the next investment. I have seen the same thing over and over and over nad over again. A investor comes in with funding and stretches it to the limit. They have $250 million in properties. Then something happens to the cash flow, and the dominoes start to tumble. One day they have $250 million the next they are watch their house being sold for 1/5 of what they paid for it. That mentor of yours took many years to get where he is, don't try to do it 5 or 10.

I completely agree with you and great post! It has taken the mentor I am referring to 19 years to build that up. He has done a lot of it through private funding by raising over $70 million in his career.

In RE cashflow is King and I have read many stories of people getting too creative with their financing and ignoring the numbers which in turn results in them losing it all. I think a key point to remember is that the more creative you get with you're financing, the more the numbers have to work out on the property.

[Freelancier]

So for example, Freelancier shows that he has never learned or experienced anything in real estate investing by his above stated comments.

Interesting. You don't know me. You don't know what I invest in or who I am related to. But you make assumptions about my experience. :rolleyes:

[Wozcreative]

Well, let me tell you, I have had a small business where I owned a property and rented it out (it was an upscale condo downtown), I've rented it out for 3 years to 3 different families, and had to "adjust" my renting prices according to the market, first year it was high, next year it was lower because there was too many units available and not enough people looking. Needless to say, I went in the negative at the end of the year for all 3 years that I rented it. I did NOT make money for various reasons. I think in my second year I was 6K in the negatives. Some of this was due to the market making me lower rent, general maintenance of it at the end of the lease, the time spent looking for tenants as well. Oh and of course, I had to have a tenant that stiffed me on a months rent. I still own it though and probably have made 35 - 45,000 on it after 3 - 4 years, but I will not know until I put it up for sale and see how the market is. I also did not do any upgrades to anything so there is nothing that will raise it in price aside for the market creeping.

My advice? You REALLY better know what you're doing if you are going to be living off these places.

Regarding your family, it doesn't matter if they understand you or not. But they may just not see that you are equipped with the knowledge to handle such a business. If you are going to be owning homes, there will need to be regular maintenance that need to happen on them.. who is going to do that? You? Also keep in mind, tenants know the codes better than any landlord.. they also get better protection from the government than you do.

Have you also thought about who is going to be doing the marketing/advertising to find renters for these locations? I'm assuming you would do the job.. that is another job in itself.

[Dan Furman]

Does anyone have any suggestions or thoughts that might encourage and help us?



Yes. Stop trying to explain yourselves, and stop trying to convence anyone of anything.

Just go DO what you want to do. In other words, Produce Income. That will make believers out of everyone.

Everything short of that is talk. THAT'S why nobody understands you.

[billbenson]

I know a kid from college (graduated in 1980) who bought a duplex right out of college with a loan from his dad. He worked a regular job, lived in one duplex and rented the other. Over time he slowly bought more property. I think he was able to quit his regular job after about 5 years. He just manages his properties now and from what I hear he is doing quite well.

The real point here is he went very slowly and never had a lot of debt.

[nealrm]

The real point here is he went very slowly and never had a lot of debt.
That is the key that most people miss.

[fayt]

Some of the most successful business people don't have a college degree or had dropped out of college. Here is a few.

#1. Bill Gates

#2. Mark Zuckerberg

#3. Lawrence Ellison

#4. Ralph Lauren

#5. Steve Jobs

The list goes on. If you have a great idea, you can make it big even without a high school diploma.

[Harold Mansfield]

Some of the most successful business people don't have a college degree or had dropped out of college. Here is a few.

#1. Bill Gates

#2. Mark Zuckerberg

#3. Lawrence Ellison

#4. Ralph Lauren

#5. Steve Jobs

The list goes on. If you have a great idea, you can make it big even without a high school diploma.
Yes, and they had to learn volumes of information to be successful. It's easy to look at the finished product and say "See , they didn't have a formal degree" , but don't skip over the YEARS that it took them to learn their business, learn from mistakes and lawsuits, and learn business in general to succeed.

You are also listing people who had a talent or skill and original products or services that changed the landscape.In the case of Gates, Jobs, Ellison and Zuckerberg, engineering or programming and they secured milllions in funding to build what they did. The "2 guys in a garage story" is misused folklore.


Ralph Lauren also worked for Brooks Brothers first before going out on his own.
It takes more than an idea. Ideas are a dime a dozen. Execution is everything. Second only to having the money to build it in the first place.

These guys may not have had degrees, but they still had to learn it.

[nealrm]

Some of the most successful business people don't have a college degree or had dropped out of college. Here is a few.

#1. Bill Gates

#2. Mark Zuckerberg

#3. Lawrence Ellison

#4. Ralph Lauren

#5. Steve Jobs

The list goes on. If you have a great idea, you can make it big even without a high school diploma.

This is a typical logic error. List a small handful of a much larger group in an attempt to prove a point. If you look at the whole set, you will see that a large majority of successful have college education. You also should look at the other side, and see the millions without college education that did not success.

However, this does not mean you need to spend $100,000+ on a college education.

[Wozcreative]

These people also spent 10,000 hours perfecting what they know before they hit it big.

Take a look at this infographic: 10,000 Hours of Practice Makes Perfect [infographic] - The Salary Reporter (http://blogs.payscale.com/salary_report_kris_cowan/2012/08/10000-hours-of-practice.html)

[fayt]

I didn't say they knew nothing and was successful. I am saying you don't need a college degree to be successful or a billionaire. It takes a lot of hard work, skills, and knowledge. They didn't have everything handed to them. Some people have started businesses in their garage and are now making millions with a small invention. The OP is basically saying his family says to be successful he needs a college degree to make a living. So I am saying that is false.