What’s ‘Luck’ Got To Do With It?
How much does luck play into success in real estate? For me, quite a bit! And I’m sure the same is true for a lot of folks reading this.
I’m a firm believer in that adage “the harder I work, the luckier I get.” The real estate journey I’ve been on has been a get rich slow train — and I honestly prefer it this way. But luck certainly played a role in getting to where I’m at today, no doubt about it. Let me break it down.
For starters, I rode a massive bull market throughout nearly my entire career in real estate. I bought my first property in early ‘08 and didn’t realize the magnitude of what was about to happen around me with the impending market crash, but in the long run it still ended up being a great time to start. I saw not only amazing appreciation over the last 18 years but also a fantastic rate environment. I was able to take advantage of many opportunities to do cash out refinances and leverage that cash to build my portfolio. I will take some credit for making certain decisions that put me in a position to get lucky in the first place, but if rates hadn’t been at those levels and my properties hadn’t gone up in value then I might be sitting here today with only the same 4 units that I had in ‘08.
My next bit of luck came from having cash on hand at the right time. A few opportunities presented themselves over the last 17 years that allowed me to buy out partners or pick up equity in solid deals just because I had the cash available — right place, right time as they say. I also worked my ass off at a job that paid well, but luck still played a part as far as having that cash available exactly when I needed it, putting me in a great position to make those financial moves. On a related note, I was also very lucky not to have any events in my life that presented an immediate need for cash; this enabled me to take very long positions on properties and see deals through to the end. Real estate has a funny way of correcting mistakes or shortfalls over a long period of time; time forgives most issues if you hold long enough.
Another lucky break saw me benefit greatly from the sheer amount of real-estate and investment-centric content that was put out into the world at just the right time. Bigger Pockets (biggerpockets.com) came into my life right when I needed it most and gave me the knowledge, mindset, and courage to engage in and commit to more deals. The same goes for Joe Fairless’ well-known podcast “Best Real Estate Investing Advice Ever” which was extremely informative and full of priceless investing advice and knowledge. Sure, everyone else gained access to that info at the same time I did, but I consider myself lucky to have been in this space at a time when resources like these were so abundant. As a side note, before any of these amazing sites were around I was reading “Foreclosures for Dummies” in a barracks bay in Georgia, trying to learn whatever I could because I knew this was the path I wanted to pursue.
Finally, I got pretty lucky buying in the right locations. You’ve heard it before: “Location, location, location.” It’s true that many areas across the U.S. saw appreciation over the last 17 years, but I made a few well-timed bets on areas that paid off fairly well: Texas in ‘08 and 2014; Nashville in 2018; Cleveland in 2016; Florida in 2020; Georgia in 2021. Looking back, these decisions might seem straightforward, but who could have predicted the explosive growth in these areas? If you say you did, it's possible you're not being honest with yourself. I picked Nashville partially because my wife went there for 3 bachelorette parties and I thought there might be a trend happening, plus it was a location I could easily “sell” her on. Thanks, country music! Total luck.
In the end, I’d not have this journey unfold any other way. There are certainly deals that don’t always go our way and I still consider myself lucky to experience those things as learning points when they happen, using them to improve our analysis and decision-making in the future. One final note: There are a lot of self-proclaimed gurus out there that claim they are the next real estate oracle of the industry. Just because you bought a house in 2009 and made a million dollars selling it 7 years later doesn’t signify genius;. It signifies a bit of risk-taking and a lot of luck.
