Thread by @EddieWouldGrow

I started dabbling in real estate investing 20 yrs ago
- I bought/sold ~10 single families, condos, multi-units
- Primary residence, rentals, timeshares, new & old
- I lost big during the 2008 crash

I finally hit a grand slam!

Here’s what I know now that I wish I knew then 🧵👇🏻

Step 1: Build a stomach for a longer-term horizon.

As immigrants, we grew up in a 2 bed/1 bath condo.

I hated how small it was. But my folks saved a lot…

…to pay for private school & college for my bro & me.

It taught me how to sacrifice today for tomorrow.

Step 2: Own >50% (e.g., control your destiny)

My worst real estate $ was as a minority owner.

I went into a multi-unit residential rental w/ 10+ others.

The lack of info, control & liquidity was unnerving.

I ended up losing over half of my capital. Never again.

Step 3: Know your limitations

I’m not handy. No fixer-uppers… only new construction.

I’m time-limited. I need great partners.

I’m not omniscient. I only invest in markets I know well.

I have a clear niche and I’ve learned to stay in it.

Step 4: Invest like a superconsumer

I invest in Hawaii & Chicago where I’ve spent decades.

But my real advantage is in Hawaii…

…where I’ve been both resident & tourist (renter).

Specifically, the big island…zipcode 96738.

Best benefit/value arbitrage in the islands IMHO.

Step 5: Go to the future and come back

Based on my analysis, the big island has:

- Growing number of direct flights

- Most agriculture = best, freshest produce

- Largest island, lowest density (perfect for post C19)

The big island will look like Maui eventually in 20 years..

Step 6: Look at an investment as both a consumer…

I rented every possible type of place at all prices.

I read every review for all the places.

I made a Venn diagram of what mattered to us…

…and five-star reviews.

Step 7: …and as an investor as well

I built a spreadsheet of comparable places.

I scraped @vrbo for price & utilization by week.

I estimated price elasticity curves…

…and laid out yield/purchase price ‘what if’ scenarios.

I knew what price range to stay within.

Step 8: We chose an awesome property manager.

Having been renters, we knew the property managers well.

One stood out as the ideal combination of…

…smarts, responsiveness, service, experience & integrity.

They were the secret weapon.

Step 9: Differentiation matters

New construction offered 3-4 bedrooms.

We added a 5th bedroom.

This made us a premium to our neighbors…

…& a bargain vs. the ultra-luxury market.

We added a mini gym with a @peloton…

…to make it the perfect place for introverts.

Step 10: Manage expectations

It took longer & more $ than expected (about 2x)

I looked hard at the worst-case scenario & got comfy with it
- A negative cash flow scenario = a tax write off
- Provided data for future relocation
- It was great family memory making with our teens

Conclusion: Timing is everything

Everything came together & the home was a grand slam
- Net ~5% yield after expenses
- Appreciated in value >25% per year
- Gives us a great free place to vacation

But we got in at the right time & had a lot break out the way.

Excited to keep tinkering & learning!