Q: Your early educational background began with finance followed by an MBA; it’s clear you had business on your mind from the start. I was just wondering what was the original impetus that caused you to focus primarily on real estate?
A: In the beginning, I was simply trying to create an outside income, a rainy-day nest egg. I never wanted to live paycheck to paycheck; I always wanted to have a cushion. How to do that? Especially with having a full-time job or being a full-time student. I didn’t want to do a multi-level marketing, I thought that was just a pyramid scam plus I’m an introvert. What other businesses to enter? What other ways to create value?
I’ve always lived beneath my income, preferring to keep my wants few and my needs even fewer. Indeed, when I graduated from college I chose not to change my lifestyle, saving the difference to help me fund my first RE investments. I’d been content as a student and I saw no reason to ratchet up my expenses.
I saw real estate investment as a side thing, a part time money making hobby, something to do/run/maintain during evenings and weekends when others were watching TV or hitting happy hour. My Dad was always open with me about family finances and often talked about his stock market investments. In addition, as a civil engineer (also an associate professor at UF) he was a very hands-on practical man and taught me how to fix things around the house, to take them apart and put them back together. As a result, I was a decent handyman, a bit of a jack of all trades.
I thought residential real estate was relatively easy to understand; we’ve all lived in a house or an apartment, seen them up close and personal. Few of us have ever run a restaurant or hotel or retail business. Also, starting out buying single family houses allowed me to start small and build. Starting out from scratch, with little to no capital, it’s hard if not impossible to buy a hotel or a mall or a strip center plus I’d have no idea how to run them. However, thanks to my dad’s training I felt very comfortable doing most of the light maintenance involved in owning residential rentals.
I also thought real estate was a very solid asset class, an excellent way to build up equity and unlikely to lose significant value or become obsolete. I’ve since learned that is not completely true, things happen that you never thought were possible but it is still more true than not.
“The first principle of success is desire – knowing what you want. Desire is the planting of your seed.” – Robert Collier, 1885-1950
As always, I share what I most want and need to learn. – Nathan S. Collier