People's egos and thinking they are geniuses because they bought a few properties, slapped a coat of paint of them and made some cash, is going to be their undoing.
I know that from experience. In the US boom the last time, I got caught up in the FOMO. The "professional" real estate investors were sitting on the sidelines starting in 2003. The cost ratio simply was not there for them to have positive cashflow.
Me, I was buying and I had two houses on the market when the reversal in June 2006 hit. Guess who got crushed and who did not.
It is the same story over and over.
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The fact that were both humble and honest enough to recognize and admit your mistake, means you are already light years ahead of most other investors these days. I currently know maybe 7 or 8 investors, and with the exception of one (the one who was actually successful and now owns 3 condo complexes with over 20 units), they ALL invest blindly, without so much as 30 minutes of research. Not a single book read. Zero strategy or due diligence. Zero discipline and infinite ego. Success or failure, they do not learn anything. They are just like the kids that invest in coins with cartoon dogs on them, same mentality.
The friend of mine who wont stop buying and going into massive debt, he is actually a close friend and I am very sad at the destructive financial path he has chosen, though there may be hope for him because he does do some minimal research and more importantly his ego never grew once he owned multiple properties, and he is actually willing to listen. I think he is finally coming around a bit and is starting to see his errors, but...I fear it may be too late for him, I think unless he sells multiple properties soon, he is done once the market crashes. I can only hope that it takes the market a few more years to drop, as he does pay the houses off very aggressively (he tries to pay them off in 4-6 years), and perhaps that way he can be saved.
Sorry if I went off the deep end there and went overboard on the negativity man, it has just been an emotionally stressful past few years, seeing the economy get decimated, seeing my good friend march toward financial destruction, taking business losses myself, and seeing more dead people the past year than I have the rest of my life combined, including some of my family members, was all just really heavy shit and I needed to get some frustration out there.
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