Smart post.

Be careful posting a link to your blog. Certain mods will end you for such abhorrent behavior.

Multi posts due to iPad. Maybe mod can combine?

I'm also interested in the domain name game. I own a few dozen that I've purchased over the years but haven't done anything with.

FYI I rarely recommend people become part time investors in real estate. I am professional investor & one of my businesses manages my 17 rental units (not huge but > 85 total beds). I see so many part timers fail when they try to be a landlord. I'm not saying it cannot be done but like most things, the 97/3 rule applies.

Just knowing the market and having experience is huge. You can wait to snatch up deals that you know will be profitable, and can pass on others that people may think are profitable, but really aren't. Also, two words that can make you rich in the long run... foreclosure auctions.

I take it this yearly rental income? Where abouts in UK?

What's the 97/3 rule? A variation on the 80/20 one?

This post is the perfect demonstration of why I wont start an ask me thread as somebody requested. This forum is filled with haters who will criticize even the most well meaning and knowledgeable posters.

+1

I really miss the old 2+2 where everyone wasn't an expert on everything. I think every time I've posted something on real estate I've been "told" why I was wrong.

edited to add:

Here's a good example below. I have no idea if DC was directly making this post at me, but I feel like it probably was. This idea that "they're just playing a different game" is wtfbbq to me.

So the guy that fixes up a building by putting in $400 doors (yes, bedroom doors cost him $408.32 installed), $1,200 washer/dryers but then rents it out to section 8 tenants and sells me the building because it's getting destroyed and repair bills are eating him alive...I then buy the building based on a NORMAL non over improved building, replace all the over improvements with normal appliances, and make bank is him just having a "different strategy????"

Or the guy that didn't fix any appliance (literally if one went bad he'd just tell the tenant to get their own)...which is not only illegal, but stupid (what good tenant is going to stay in their apartment when the AC is out, or the fridge dies and THEY have to go get a new one). He then sells me the almost empty building...I pay less then 40 cents on the dollar for repairs and get the placed fixed/filled in 4 months...so he isn't an idiot and we're simply playing a "different" game....come on man. He was a ****ing ****** and he's lucky DSHS/NWJL didn't get all up his ass.

MILLIONS of people are landlords, you don't think at least a few of them are complete morons.

DC's Quote

Each landlord is pursuing a strategy that plays on their strengths, and fits into their overall life goals. No one is necessarily outsmarting anyone. They're just playing a different game.

This is basically why RE is so easy to get started in. New entrants are often playing in the kiddie pool, they can always outwork the pros (sweat equity), and take on deals that don't make financial sense for bigger guys with more overhead. The biggest potential problem is liquidity (which is usually where your day job comes in.) And if you get sick of it, you can often/usually exit without taking any financial loses. (unless your strategy was highly leveraged and/or highly speculative.)

It's not like the financial markets where there are huge pools of people going after the same money with similar strategies and essentially the same information.

RikaKazak, yes my post was about your post. I don't mean to imply that every landlord out there is running a perfect tight ship, but I also think you're overestimating how many people are making meaningful mistakes, and how much it matters. The quality of your CL posts and 'advertising' is rarely going to turn a crappy rental into a cash cow. A $400 door isn't generally going to sink your Sec 8 cash flow. The little things add up at some point and may be an indicator of a weak landlord, but it's not necessarily a tell tale sign.

Maybe it's because here in DC the entry price is higher and it weeds out complete amateurs who think they can become RE moguls off their credit card and $5000 they have saved up, but I wouldn't say that there are that many people making disastrous mistakes to matter all that much.

I do not see people buying $1200 appliances for their Sec8. Are they out there? Sure. I know that. But this is not a typical scenario. And trying to (1) find these people at the right (2) time when they're willing to sell (3) cheap is LUCK and takes TIME. If you network your ass off and actually build good working relationships (TIME) and get a bit lucky, you can find yourself at the right place at the right time. No one is denying that. What I'm saying is that it's not that quick and easy, especially if your income is coming from somewhere else and you don't have the time to burn to look for amazing deals.

That's not my point. The point is that most are not too horrible and while their mistakes may keep them threading water, they're usually not that desperate to sell. Finding the right person at the right time is the hard part - and the whole freakin' town is trying to look for the same needle in the haystack. There is a whole side-industry trying to provide deal flow scouring the region to find these people. You make it sound so easy.

Other things you described are slumlord 101. They may be against city ordinances, but you should know that - for the right people - this line of operating is typical and very profitable. Not everyone is striving to be the dream-landlord.

The fact that you called Namepros the "Two Plus Two of Domaining" (or whatever) makes me seriously question if you're qualified to be giving advice.

Sorry.

Its not meant to be a personal sleight, maybe you just haven't been to Namepros for a long, long, (longlonglong) time and don't realize what it is now but that's not where you go to learn how to do it right. There's a lot of self-aggrandizing 'experts' who talk a big game but aren't.

Sounds a lot like 2+2 to me.

Do you have a better recommendation for where people should go to learn domianing?

I have money in bitcoin still and am also investing in Counterparty.

97% of people will fail where ~3% will succeed.

Also the vast majority of the time, being a part-time landlord cannot be +EV for most.

If we define landlord as people who own property for the exclusive purposes of renting for profit, then I completely disagree with your first point in bold above. IME the majority of landlords all make the same massive mistake: they overpay for the property. This is most likely born out of the tendency of people to underestimate the expense of owning property for rent.

In most markets I have experience in there are a few players who figured things out and then scaled. Then there are a lot more players who, in one way or another, subsidize the small number of units they have. The latter is condemned to be small scale forever, because scaling only increases the resources they are losing.

This isn't a unique phenomena to RE imo. Small businesses across most spectrums behave the same way.

I mostly agree with the rest of your post re: finding a deal; with one important distinction. Finding people who are frustrated with their properties is actually pretty easy. It's finding the ones who are frustrated enough to face the reality of the true value of their asset and have equity. That is very hard indeed.

Absolutely.

Elliot Silvers blog would be a great starting point for someone brand ass new to domain investing. He actually acquired the domain "domain investing" and now hosts what was formerly EliotsBlog.com at http://www.DomainInvesting.com.

He is a successful domain investor and very, very open with what he does, how he does it and what his results are. The important part (and this is the really, really important part for newbies) is that he actively makes money buying and selling domains, now. He's not some half ******ed blowhard from the 1990's living off parking income from one good decision he made during the Clinton administration. If you want to see what failure looks like, his weekly broker listings- where he lets his readers post their own names for sale- is always pure comedy gold. Elliot himself, though, is more than helpful.

Another one (that has decreased in quality over the past year or so but the archives are worth it) is Shane Cultras blog, http://www.DomainShane.com.

Lastly, http://www.DomainSherpa.com. Michael Cyger drills deep-deep with a lot of people who've succeeded at it. Tons of learning to be done there for someone totally new.

But whatever you do, do NOT go to Namepros.com and expect to find anything but a bunch of clueless idiots giving bad advice to other clueless idiots. There are obviously exceptions, there are some talented people who are members there but they all seem to be inactive, anymore.

I like the idea for this thread.

Patience and networking have been key for my successful passive investments. I've built a good network of people I share (important for this to be a two way street) ideas with, and I've done well riding the coattails of just the very most high confidence investments sent my way. When I'm being pitched something I am more interested in how much the person I trust has on the line, and how passionate they are about it than the actual investment vehicle which I may not have the knowledge or time to adequately evaluate every time.

Also spending time in my field of expertise (poker) and trying to let my investments truly be as passive as possible (use index funds or long term stock plays, or *passively* invest in a business) is big life wise. The time you have to put in to gain a small additional edge in something like financial markets on your own is just massive. Unless it's something you're super interested in and you don't have another profitable way to occupy your time it's prob not worth it.

How knowledgeable should one be before attending foreclosure auctions and what resources do you use to a) build that knowledge and b) discover local auctions?

This is interesting. Out of all the alternative investment opportunities, why Counterparty? What do you see in it for the long-term, and how do you think it will be adopted? Really interested in why you'd choose this over PPC, LTC, DGC, etc.

My best advice would be to go and live in the nearby area for a month and just learn the ins and outs. You'll understand where the good areas are, good schools, etc, which is really hard to discover via google. It's certainly a grind, but once you meet one or two people familiar with the area you'll learn quickly. I've searched hard for a substitute, but physically being there and talking with RE agents/contractors in the area is necessary.

Rizas post was very good. Additionally there are a lot of people that'll buy on the location, speculating on future appreciation. There are people that put in nice appliances and extras that cut into their cash flow. While those things are nice, you are not living in the unit and the tenants do not care. Lastly, people possibly get overwhelmed or over leveraged. I've bought two places mid rehab when the owners quit. Having cash allows you to pick up places quickly for 30-40c on the dollar.

Counterparty at least is trying something new, rather than just a pure Bitcoin clone. No idea if it will succeed and likely is hugely overvalued now, but hey, one of these will hit and someone will get lucky.

You should create a "Ask me anything about flipping domains" thread. Would be a interesting read

I don't do much flipping. But that's a profitable niche if done right. It takes a certain amount of salesmanship and moral flexibility I don't have though. You have to be able to convince people your domains are worth way more than they actually are. I guess I'm a bad liar.

Well, a thread about buying domains and creating a parked domain portfolio would also be a very interesting read.

Counterparty did with two developers in four months what Mastercoin could not do in over a year with many more people working on the project. Counterparty was also started and continues to operate in an extremely ethical way. Counterparty has the following functionalities that are actually functional.

Decentralized exchange
Derivatives
Currency hedging
Stock creation (IPO a company and issue stock)
Asset creation (Altcoin creation, for example, or real world backed assets)
Betting (Trustless Win/Loss bets on anything)

If you have any other questions, post it in the altcoin thread and I'll answer them there. I don't want to derail this thread.

Counterparty, to me, is the most exciting thing since bitcoin. If you have ever heard someone say "bitcoin the currency is just the beginning, the protocol is the real revolutionary invention" or something similar, things like Counterparty is what they were talking about.