Looking to Invest in Real Estate? Don't Waste Your Time Here.
Whenever I’ve been interviewed about real estate investing or even on my own podcast, The Richer Geek, I always mention BiggerPockets as a great (and free!) resource for anyone looking to or already investing in real estate. But recently, I was helping someone with a plan for getting started in real estate investing and they asked “How do you actually use Bigger Pockets?” I realized he's right.
Telling someone to "just go to BiggerPockets" is like advising a friend on where to take a trip and saying "just go to Europe". Your friend would want more details like -- where in Europe? What are the best things to do? What are logistics involved?
The problem with "check out BiggerPockets" is the site is too big and has too much information. Without details on how to actually leverage the site, it's not useful at all.
I realized that I should share how to actually navigate the site. And, how can you avoid spending time in the wrong areas so that you don't end up chasing the next thing? Because when you get on BiggerPockets, you are constantly bombarded with people that seem to be doing all these amazing things.
What is BiggerPockets?
If you haven't heard of BiggerPockets, that tells me that you have never done a single Google search on real estate investing because this site is the biggest of all real estate investing sites. You can probably stop reading this right now because you don’t care at all about this topic. 😊
If you are wondering why it's called BiggerPockets? I have no idea. But I've often described the site as the “LinkedIn of real estate investing”... but it's really more than that. BiggerPockets is massive. There's forums, blogs, marketplaces, ways to connect with other investors, a weekly podcast and other education resources. And that's where there's a challenge. Nowadays, it's probably more accurate to call BiggerPockets “The Overwhelm of real estate investing”.
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Like any other social media platform that has grown, added features and has years of content, the site can be overwhelming to the point of not always being useful.
In fact, there are 3 things that drive me crazy about BiggerPockets:
Finding information in the forums can be a waste of time. You can do a search on the site but like all searching, you can spend hours reading threads to get the information you are actually looking for. Likewise, you can set up alerts to let you know when a certain topic is being discussed, but I’ve yet to find these useful in a way that stops me from being bombarded with useless alerts.
For example, as a hotel owner & investor, I want to know when others are talking about investing in hotels. But instead, I get alerts on people talking about traveling to visit their properties and staying in a hotel. Sorry, but that’s not what I was looking for and I haven't found a way to dial this in to relevant content.
Sensationalism & Glamorization of Real Estate Investing. I get it.... without a great “click bait” type of headline, no one reads the article, blog post or listens to the podcast. This is just part of today’s digital media landscape. Unfortunately, this means you get titles like “20 houses in 1 year on a teacher salary”.
The challenge is that everyone’s situation is different and sometimes hearing sensationalized stories gives new investors this fear of missing out. Look, if that teacher lives in the Midwest, he/she could getting homes for less than $50k cash. Oh, and they will likely be in terrible neighborhoods where high resident turnover is an issue. So in reality, maybe that’s not what ultimately would fit your goal. Combine the steady stream of these stories from the podcast, the forums and the blog posts and suddenly, you can be a victim of shiny object syndrome.
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There’s a general theme and underlying focus on how people can quit their jobs if they invest in real estate. Let’s be clear. You are not quitting your job to sit back, relax on the beach and collect rent checks with no work. You only get to collect checks passively if you are passively investing in other people’s projects.
BiggerPockets is geared more for the DIY person, not the passive investor. So, if you want to replace your job with investing in real estate as a job – go for it. But you are not retiring and you are not necessarily leaving the rat race as advertised by BiggerPockets. You may leave corporate America but now you are in a different rat race. Instead of a cubicle, you might be surrounded by hoarder houses. You may be working all kinds of odd hours. And, instead of answering to your boss, you might be dealing with sellers, lenders, contractors and/or tenants. If you prefer real estate investing as job over corporate America that's OK --I’m just saying you should be clear that you are trading one job for another.
At this point, you may be wondering if I’d recommend using Bigger Pockets at all.
The answer is absolutely “yes” -- but with constraint. Here are my thoughts on how to leverage BiggerPockets for the most value:
To avoid overwhelm and shiny object syndrome, do not even spend one second on the site until you’ve created your own plan first.
Why? Because you need to assess your situation before you even begin to research and explore options. If you don't, you'll waste hours trying to figure out which of the several strategies and niches will work for you. Every strategy will sound amazing. And, without focus, you'll waste your time and not actually get started at all. Here are some questions to explore that will help you build your plan:
Why do you want to invest in real estate? Is it to generate income now? Is it to build a business? Do you just want to buy a vacation home and rent it out some of the time to offset costs? All are different scenarios that would lead to different approaches. You need to know your goal first. While you are at it – think about a 5-year timeline for your overall goal.
Where do you live? Is it feasible to invest locally or are you going to need to look at other markets?
How much time do you have? How consuming is your full-time job? What are your family and other obligations? Do you have the cycles to have a real estate investing business?
What are your personal finances like? Do you have a solid foundation with good credit, retirement savings, spending less than you earn, etc.?
How much capital do you have? And, where is it coming from? Besides cash, other sources could be a self-directed IRA, a solo 401(k), a home equity loan or even private lending. Each source has different implications and potentially rules.
Do you have a network of people that can help you with your real estate business? Examples would be a real estate agent, a lawyer, a CPA, potentially property management and/or contractors? Do you have a business partner or would you be doing this on your own?
All of these questions help to determine which real estate investing niche is right for you. If these seem to not be enough to give you a clear direction, send me a note on LinkedIn. I'm happy to help with ideas to narrow down your plan.
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Create connections and build relationships.
Armed with your plan and specific areas of focus, search for local real estate investors in the niche you've determined through your plan and connect with them. Here’s how to do this:
Step 1 create a free account on BiggerPockets. Add a profile picture – don’t be lazy. No one is going to connect with a blank avatar. Add details to your profile like what you do full time, what kind of real estate investing you are looking to do, where you live, etc. Just like on LinkedIn, you are going to need a complete profile to get the most out of networking on the site.
Step 2 choose the search function and select “member” and then type in a description. I typed in “Scottsdale” which then brought up relevant members in these categories. If you upgrade to a paying membership, you can further sort by niche and other options to narrow down potential people to connect with.
Step 3 read the descriptions of other members. Have they completed projects and done deals? Are they more experienced than you?
Step 4 send him or her a connection request with a note, sharing how you came across their profile and what caught your eye about this person’s experience. Let them know you are trying to connect with like-minded people. You are just trying to establish a connection and see if there’s a way you can help them. Don’t -- I repeat DO NOT ask to meet them for coffee or take them to lunch. They are busy and you’ve added zero value to them - yet.
Step 5 develop these relationships. If you read something interesting that relates to the area or asset class they invest in, share it with them. If there’s a meetup that you found to be valuable, share that resource. Look for ways to add value. This is really no different than networking on any other social media platform.
You may be wondering what's the point in developing these relationships? Why bother? Here's one personal example…
After the purchase of our first hotel in 2017, I was curious to learn about other market niches and connected with a local investor who did fix and flips of single-family homes in the Phoenix metro area. My husband and I invested in a small single-family flip project with him. Through that experience, we learned that we have no interest in flipping homes as a focus area for our company. The great news is that we didn't have to learn the hard way on our own. But even more valuable than learning about that niche, is this trusted relationship that we've developed. We now have another local investor that we can reach out to for referrals such as contractors or bounce ideas off of when needed. There's no way we would have met without the connection through BiggerPockets.
I believe that leveraging the connection opportunities through BiggerPockets is the absolute highest value you can gain from this site.
At this point, you’ve created a focused plan and you’ve reached out to other local real estate investors to build your network. Now is a great time to leverage the other resources on BiggerPockets.
Here are my top 3 resource recommendations:
Guides. Under “Education” and then “Guides”, there's list of “How-To” guides for many common real estate investing niches. These are all excellent free resources.
Local events. Under “Network” choose “Events” to find local meetings in your area. It’s great to connect with other like-minded people which will help you grow your network and learn more about the business.
Tools. Under “Tools” there are a number of basic calculators you can use to do some quick math on potential properties and projects.
If you’ve been suffering from overwhelm, analysis-paralysis and shiny object syndrome, stop spending your time on BiggerPockets in the wrong areas and start leveraging the site in the best way possible. And, if you want to hear real stories of other people in Tech that are investing in real estate in a very real down-to-earth way, check out my podcast The Richer Geek.