There and Back Again: A First-Time Real Estate Investor’s Tale

By
Real Estate Broker/Owner with Pinto Capital Investments

“This is a story of how a Baggins had an adventure, and found himself doing and saying things altogether unexpected.” 
― 
J.R.R. Tolkien, The Hobbit

 

Hello, and thank you for coming back to dive into the nitty-gritty of how we got started! For those of you who are new to our blog, welcome! My purpose here is twofold: 1. Talk about my journey towards financial freedom including both my good and bad experiences (in hindsight a lot of bad); and 2. Provide a one-stop shop for educational resources for the first-time investor. During the past few months, I have learned many lessons I wish I would have known when I was first getting started. I will include applicable links, posts, and/or articles I thought were useful as I was (and still am) learning. If I can help just one person realize their dream of financial freedom or prevent one entrepreneur from making the same mistakes I have, this blog will have served its purpose.

 

The Yin and the Yang

If you have ever listened to a real estate investing podcast or read an article on the topic, there is a disparity between the number of real estate success stories and nightmare stories. You’ll hear stories about investors that own 1000 units and have 1 million more units under contract—emphasizing that you can be just like them! But what about that private money investor that backed out two weeks before closing or the family of 15 occupying one of your units? I get it, no one wants to tell you about their issues dealing with tenant, mold, termites, natural disasters; seeing it as a mark of shame rather than a badge of experience. But that is exactly what you need to hear about! It is possible to have too much of a good thing and only looking at the world through rose-colored glasses can have negative consequences. Here’s why. 

  1.      .  Overestimating your skills. As humans, we have a tendency to see ourselves as smarter, more fit and more popular than we are. Although impossible, 93% of Americans think they are above average drivers. Exaggerating your skills can lead to an overly inflated sense of self and a break from reality.

 

  1.       Arrogance. Believing you can do anything is great for motivation but only when balanced with self-awareness. Believing you don’t need to study for the test because you know everything or thinking you don’t need presentation materials when pitching to a potential investor can have adverse consequences. Believing everything comes effortlessly can lead to a sense of entitlement and damage your self-worth.

 

  1.       Idealizing reality. The truth hurts and our instinct is to avoid pain. So some people become so optimistic—avoiding negative feelings or situations—that they begin to deny the truth. There are properties out there that are absolute lemons and overlooking the warning signs because the numbers “look good” is a potentially costly and embarrassing path…trust me.

 

Fog of War

When I was in college, I would play a computer game called Civilization. There were many iterations of the game but the basic premise was the same: found a city (near water and food, of course), explore the area, found another city, kill some barbarians and continue expanding. The first turn you were surrounded by grey, unexplored map called the “Fog of War.” As you expanded your empire and explored, the Fog of War dissipated until were able to see the whole map: locations of resources, coastlines, enemies and more. Much like Civilization, you are surrounded by the “Fog of Knowledge.” You may not be able to see that road to your first flip or the path to apartment syndication. So how do you get started? How do you sort through the tremendous amount of resources available on Real Estate Investing? How do you cut through the fog?

The phrase “drinking from a firehose” comes to mind when sorting through the myriad of information that can be found in posts, books, articles, websites, conferences, talks, meetups and podcasts. And that’s just the FREE information! On the not-so-free side, there are the top level “gurus” peddling their “unique” programs for thousands and hundreds of thousands of dollars. With all of these resources, I was completely overwhelmed and didn’t know where to start.

 

Taking the First Step

My journey began like many other entrepreneurs with a recognition of a problem that needed a solution: I turned to Google. In September 2018, I started Google-ing “ways to make money” and “profitable hobbies” and I stumbled upon a blog post by a Naval aviator on real estate investing. His name is Stuart Grazier and he is the founder of Military Investor Network (MIN). MIN was created to serve fellow military members by offering a central location for investment opportunities, networking, and education. If you haven’t checked them out or talked with Stu, he is an awesome guy and I highly recommend reaching out to him if you are even remotely interested in investing. Check out our Resources Page for a link to his website and his contact information.

What caught my attention was the way Stu talked about the ability to find financial freedom. He spoke about the “Big Four” ways to make money in real estate: appreciation, cashflow, depreciation and loan paydown. He opened my eyes to the vast potential of passive income and how I could achieve financial freedom through real estate investing. We use this term “financial freedom” a lot here, so we will put this and other terms into a glossary that I’ll build upon as this blog grows. For now though, financial freedom, in essence, is having enough passive income to exceed your expenses, affording one the opportunity to live solely off of passive income and quit their job, if desired. Isn’t that cool? Think about the dreams you could achieve, the hours you could spend with your family, the one-in-a-lifetime trips you could take if you didn’t have to worry about showing up to a W-2 job every day. The world is truly your oyster!

              As mentioned in the previous post, Stu also recommended two books that utterly changed my life: Rich Dad Poor Dad by Robert Kiyosaki and Set for Life by Scott Trench. The “Little Purple Bible” as it’s sometimes called, Rich Dad Poor Dad taught me that my primary residence was really a liability not an asset and that you make your money work for you, not you work for your money. It is so well known, I won’t dwell on it, although I highly recommend it. Set for Life taught me about how to save money to buy my first property by minimizing my expenses and house-hacking instead of renting. House-hacking is when you buy an owner-occupied multifamily home (duplex, triplex, quadplex) and rent out the other units—having your tenants pay for you mortgage and essentially living for free. My mind was blown and I made a vow that when we hit dry land again, I was going to purchase my first house-hack (which I’ll talk about in a later post.)

              But saying I wanted to buy a house and actually buying a house are two completely different things. I needed a realtor; I needed a team; I needed people who knew what they were doing. What I really needed was a network. In the future I will go in depth about the people I have met along the way and how they have helped me grow (and continue to grow) into the investor I am today. In the meantime though, I have asked my wife to tell you a little bit about her experiences and how we got through this together.

              To continue following our journey, check out https://rookierealestateblog.com/. There, you’ll find book recommendations, podcasts and additional resources to get you started as a Real Estate Rookie.

Stay tuned for more blogs on networking, my first and second property, my brief stint as a new construction developer and more! Please also feel free to contact us or mention in the comments topics that interest you!

 

About the Author

Anthony Pinto is a Submarine Lieutenant, husband to Peggy, a Navy Nurse Corps Officer, and doggy-dad to a rescue, Rudy. Currently stationed in Norfolk, VA, he is a member of the Hampton Roads Investor Group, Tidewater Real-Estate Investors’ Group (TRIG), Bigger Pockets community and Michael Blank’s Deal Maker Mastermind. Since acquiring 8 units in three months, Anthony has expanded into apartment building investments, utilizing Michael Blank’s Ultimate Guide to Building Apartment Buildings with Private Money course. His company, Pinto Capital Investments, focuses on the Kansas City, North Carolina Triad (Charlotte, Greensboro, Raleigh), Hampton Roads and Philadelphia markets.

If you want to know about getting started with Real Estate investing, how to transition into apartment investing, or how to become a passive investor, he can be contacted at pinto.capital@gmail.com, at Facebook or at our site Pinto Capital Investments, https://pintocapitalinvestments.com/.

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