Jennifer and I spent the weekend in Los Angeles. Besides great food, and new friends, Los Angeles has more to offer to the modern-day real estate investor.
You see, in the past LA was a market where only the experienced, well capitalized pro could succeed. As I travel the country speaking to real estate investors, it has become clear to me that the market is on the rise, and new investors are gaining confidence.
I spent Saturday teaching the Ugly House Seminar. This is a seminar I host, in partnership with local Real Estate Investor Associations. In this seminar, I teach what I believe, “Real estate is local, and every market has opportunity”. Although I have never bought a house in LA, the fundamentals of the real estate investor business apply to LA, the same as Cleveland, Dallas, or any other market. Here are some of the takeaways that were validated on my visit:
- It is challenging everywhere. The single most common objection I hear in a market is, “It is different here”. I embrace this. It is good that people understand “My market isn’t like Dallas”. I get it, and that is the first step to success. You see, people read about how good of a market Dallas is for investors, and they focus on what they don’t have, instead of what they do. Every market offers challenges and advantages. I challenge you to be cognizant of the challenges, but FOCUS on the advantages. One such advantage in LA is rapid appreciation.
- Supply and Demand is the Key. One of the first things I teach is understanding your end client is the major component to successful investing. I asked the audience, “How much can you pay for a three bedroom home in Orange County if you intend to wholesale the property to another investor?” The responses varied, and then finally one young man named Brandon answered correctly. Brandon said, “It depends on how much you can sell it for!” He hit the nail on the head. What someone will pay for something determines market value, PERIOD. The antiquated formulas and lazy mans way of investing is the sure-fire way to go broke. You have to educate yourself, and network. Like the saying goes, “Your network is your net worth”.
- Passion and Focus will determine your success. During economic downturns, fortunes are created out of thin air. Only the driven, educated, networked, and focused investor will be poised to take advantage of the opportunities created by markets in turmoil. I use the example of a golf swing. If you are focused on your back swing, hip position, and form, you have control over what is about to happen. If you notice something is out of sync, you can stop, take a deep breath, re-position, and fix the problem. If you are not focused, and determined to position yourself properly, what happens after the club head strikes the ball cannot be helped. Plan your work, work your plan, and don’t let your work, work you!
LA was an exciting experience and I am now excited to head to Baltimore today, and DC on Tuesday. Then off to Columbus, OH on Saturday. What would you like to know about those markets?