I’m going to share with you something that is one of my secrets that is definitely against the grain. It’s probably a bit controversial and so, I’m sure we’ll get some comments down below, some people reasoning with me, but I would retard it that you are better off in many cases by scorning much of the real estate information that’s coming at you.

The Information Age

We’re in the information age. There is so many things coming at you all the time, so much better information that it can get you all baffled. What I have discovered is that there’s much more loud lore. Noisy, necessitating it’s not productive. It’s not going to help you. Then the issue is signal. Signal means that those fragments of prudence that are absolutely essential. Tell me talking here what would be some of the racket that you’re going to read about in the news. I’m going to say ,” Noisy news .” Noisy news going to get events like foreclosure speeds. It’s going to be, you’ll hear words like” prepare starts .”

Interest Charge

They’ll merely talking here overall sales, both of brand-new and existing. You’ll read these events in articles. You’ll read affairs where it talks about interest rates. I know, some people are going ,” Phil. Interest speeds, those are really important .” Okay so this is what I characterized, in most cases, as loud news.

• First of all, who’s creating these news articles? Writers .
• What are they compiling them for? So parties will speak them .

They’re not real estate investors. They’re not in the field doing the business. They’re scribes, and they prepare these articles so parties will speak them, but it doesn’t mean it’s going to help you and your business. Now, some people say to me ,” Phil. I want to keep up to date what’s going on .”

Real Estate on a Neighborhood Level

Well okay, this is the next part of this. If the foreclosure paces are high, the stir starts are low, the sales are low and the interest rates are high, how does that change the behaviour you’re going to invest? That’s a big question, right? Because I would position that regardless of where the market is, my approaching is still almost identical. I exclusively buy rental owneds that cash flow improbably well. Otherwise, I merely throw the transactions. If a agreement is a good deal, I don’t care if the interest rates are high or low-spirited. I don’t care if the sales are good or bad, because all of this material, here is a big one, this is macro. This is what’s going on on a national level.

You” know what i m imagining “? Real control happening on a neighborhood stage. Real control is happening in the middle such micro localities that even if the city” ve forgot” expense in owneds, it doesn’t mean the entire … the neighborhood you’re doing a deal in is misplacing expense. Warren Buffet does a great chore of communicating these principles when he talks about the relevant recommendations, looks just like you buy a farm and you buy it based on what it’s going to produce , not based on what the cost got to go do each and every month. Following all of this is largely a squander of most people’s time, because it really doesn’t change a prudent real estate investor’s approach.

Bulk Properties

Now, if you are buying publication owneds, 2,000, 5,000, 500 dwellings at a time and you’re a hedge fund proprietor, okay, you have been able insignificance everything I’m going to talk about because you do have to watch all these things, but for all of us individual investors, this material really doesn’t make a big force. But I’ll tell you what it does do and it amazes new people, it perplexes subsisting parties .” Uh-oh, the stir starts are up now .”” Oh my gosh, the sales are up. Okay, the real estate sell is booming again. I can’t find deals again .” These are the kinds of parties freak out about and good-for-nothing of these matters to me, because we were receiving great fund when the market was booming in the mid 2000′ s. When the market collapsed, we made a ton of fund, when the market is on its way.

People Will Always Necessity a Lieu to Live

We’re always being very productive because the real estate business is specially which is something we do at residential, is very consistent. It’s going to be consistent because people always imply a situate to live. We exclusively select those deals that stand on their own two feet. I’m not to be concerned about what’s going to happen next, which is, here is the next slouse. You can’t prophesy the future. I know I’m abounding your bubble because you were probably one of the few that was expected that the market was going to collapse in 2007, and so you pride yourself on predicting the future. I got news for you, you can’t do it.

You Cannot Predict the Future

Predicting the future is a huge waste of time. Real control investors should not be investing in deals, I represent, some of the longer term basis, based on what’s going to happen in the future because you never know. Tell me give you a simple speciman. In 2010, 2011 as the best interest are truly, really low-spirited, everyone said the rates were going to go up. In 2010, they were going to go up, they didn’t come near in’ 11. They didn’t come near in’ 12. They became up a little bit somewhat in 2013. We don’t know what’s going too happen. This is fascinating, in 2007, they did a huge analyze when the market begun to collapse, when they’re asking all of these brilliant economists ,” Hey, are we about to have the most difficult disastrous submerge in their own economies that we have since the depression ?”

Almost everyone said, “No.” And we were in the middle of the put and they didn’t even know. We’re shitty at predicting the future. We’re terrible at predicting the future. I pause it to you here that you attempting to predict the future is a complete waste of hour. Noisy news, was not just does it disorient you, is not simply is on a macro stage on almost all cases, so it’s pretty much pointless regardless, but similarly, to try to use that data to make decisions is various kinds of a poverty-stricken approaching because you can’t prophesied the future anyways. I represent, when the market is as bad as it is, what’s supposed to happen is the interest rates are supposed to be up, but they’re not. They’ve been down.

I mean, we don’t because everything is different all the time. We don’t know what the future retrieves. With having said all that, where is the signal? Where is the signal? This is the good stuff. Where is this? It’s in doing deals. It’s getting out there, get owneds under contract, get owneds slammed the hell is prudent deals and get cloth done. When you’re in the game, that’s when good affairs happen. By the time real information smacks the newspaper, if you are out there doing the transactions, you would have already known about it.

Example

I’ll give you a good example. Various years ago, the market is thawing down and everybody is panicking and the sky is descend, and they devoted … The government did a tax recognitionfor anybody that bought home, like a first time dwelling customer excise recognition. When they liberated that, especially as it started to expire, right before it expired, there was a huge lift in sales. If you had some deals out there, you reaped it. You made some fund. We did. We made some good fund from that. Another speciman is when the market really hit rock bottom, which is in about 2012, a lot of hedge fund came in and bought a cluster of property. Then in some sells, they’re still buying them right now, but that’s really trailing off. I represent, it was like an in and out.

What happened was, if” youve had” owneds on the market, you had deals you were working, you got paid. It was nice. But hey, formerly it built the information, that Blackstone association was to purchase a whole cluster of owneds. Just as rapidly as it built the information, slam, it was already departed and you missed your opening. The signal is out doing deals. Now, in your neighbourhood, neighborhood sell, there may be some statistics that could be very helpful. Perhaps your neighbourhood board of realtors releases some data. Some of that can be helpful. That is also possible signal very, when you get really, really localise. If you’re in a big city like Los Angeles and they give you Los Angeles-wide statistics, that’s still not as helpful. I represent, you are going to sharpen it down ,[ inaudible 00:09: 01] various kinds of level.

What I’m trying to get across is the idea that a lot of parties expend a lot of time wasted on concentrates on information, as opposed to focusing on doing deals, because when you’re doing deals, great things happen. That’s where the information comes into play because you’re there before the essay is coming back. You know what’s happening before anything else is occurred because you’re out there. What drives me seeds is when someone just takes a cursory glance at their sell. They read a couple clauses and they disappear ,” Well, around here, Phil, things are a lot different than where you live .” I disappear ,” Certainly? How numerous transactions have you been doing this last-place month ?”” I’ve never done real estate before, Phil .”” Oh, so you’re giving me some the recommendations on your neighbourhood sphere and you’ve never done a bargain there .”

The Real World

That’s the difference. The signal comes from being in the real world. You’re not going to shortcut it reading some information. You got to get out there and do deals. I got a little intense on this one. You could tell a material drives me seeds when people do this, when they condition these assumptions based on some macro information, I’d tell you … Now, am I saying that you entirely shut off the information? No. I represent what I do is, I’m always tracking what’s going on out there, but I exclusively read the articles that I can tell has some signal on it. Most of them aren’t anything like ,” Auctions plummet in November .”” The National Real Estate Associationsaid that real estate crisis are really leveled up .”

They shape these grandiose claims and it’s like ,” Okay, so it’s November. Yeah, of course real estate slows down in November. That’s Thanksgiving. People don’t buy as much, as well as December .” Then June, parties buy all- It’s much more bustling in June because everybody’s out of institution and they’re all buying houses to get change for the following year. The key here, in my opinion, shut off the loud information, don’t try to predict the future and going to be okay and do this business in a manner that is whereby the bargain stand on their own two feet. It doesn’t matter what happens tomorrow. You’re still going to get paid.

All right, cool. Well, I’m Phil Pustejovsky of Freedom Mentor.com. I If you completely disagree with me and you think I’m just … I’m out on the left field and the best thing to do is to merely focus on the information every day so” youve never” miss a bit. You can also check out my publication, How to be a Real Estate Investor