real estate fastlane?

[MJ DeMarco]

Right 9 out of 10 people won't make that kind of money on wallstreet. Like wise 9 out of 10 people will fail at business. Same odds.

IMO, your assessment is seriously flawed -- like saying that the difference between 1 in 50 and 1 in 10,000 is statistically insignificant. If you follow a proven formula founded on mathematics, you can tilt the probabilities in your favor ... but hey, if your assessment of hitting it big in a job is a 10-to-1 then perhaps a job is better for you. I'd say it's more like 10,000 to 1 while a Fastlane that adheres to the commandments is more like 10 to 1. Those who simply get into business because some business book said "start a business and get rich!" -- yea, their odds aren't good either because their premise is already flawed before they begin.

 

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[imirza]

IMO, your assessment is seriously flawed -- like saying that the difference between 1 in 50 and 1 in 10,000 is statistically insignificant. If you follow a proven formula founded on mathematics, you can tilt the probabilities in your favor ... but hey, if your assessment of hitting it big in a job is a 10-to-1 then perhaps a job is better for you. I'd say it's more like 10,000 to 1 while a Fastlane that adheres to the commandments is more like 10 to 1. Those who simply get into business because some business book said "start a business and get rich!" -- yea, their odds aren't good either because their premise is already flawed before they begin.

I wasn't talking about any job , I was talking about wall street. Goldman Sachs has 30,000 employees and around 10% of them make $1 million or more per year. That's 1 in 10. Statistics are similar in other wall street firms and hedge funds. Seems to me on Wall Street, you have a 1 in 10 shot of making the big bucks that will send you to the Fastlane. Pretty good odds as far as I am concerned.

 

[MJ DeMarco]

What are your odds of getting an interview at Goldman Sachs when every degreed finance major wants an interview? And then, once you get the interview, what are your odds of actually getting the job? And then, once you get the job, what are the odds you navigate the corporate landscape and actually ascend into those big mgmt positions? Mulitply each probability and I guarantee you're looking at 1 in 10,000 at least.

If I thought the fastlane strategy was a 1 in 10000, I wouldn't have bothered to write a book -- just go play the lottery or hit the casinos.

 

[Rem]

Actually, this is a misconception.

A lot of first time investors think smaller props require less capital investment than the larger ones.

That's not always true.

Hey you learn something new every day. Thanks for the post. Well if this is the case then maybe first time buyers are too wet behind the ears (such as myself) to know these things. It certainly helps to read and learn more about RE investing.

 

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[redpopular]

What should one do while he or she is investing in real estate for the first time?

 

[snowbank]

What are your odds of getting an interview at Goldman Sachs when every degreed finance major wants an interview? And then, once you get the interview, what are your odds of actually getting the job? And then, once you get the job, what are the odds you navigate the corporate landscape and actually ascend into those big mgmt positions? Mulitply each probability and I guarantee you're looking at 1 in 10,000 at least.

To add to this, one thing that hasn't even been added to the equation yet is control. It might not seem like it would effect the mathematics in something like this, but it will further prove how substantially different the odds are of getting into the fastlane quickly in a wall street job compared to a business. An entrepreneur can formulate a plan to escape the rat race in a year.

If he fails 9 out of 10 times, so be it. He can try again the next year and if he fails 9/10 times again he can try again.

However, he has the ability to formulate a plan to exit the rat race in 1 year if he'd like. Someone in a job on wall street does not have the ability to formulate this plan, as their plan will be laid out for however it best benefits the people who control them.

So if we did pretend the wall street guys who made it that far(note: we'd have to also calculate in all the guys who quit because they couldn't take it or were fired, substantially lowering the % of fastlane employees), and we say they're aiming for a 10 year plan to exit the rat race, if we pretend the entrepreneur has the same exact odds, he can still formulate a plan to be out in 1 year. The wall street guy has close to a 0% chance of being out in 1 year. The entrepreneur however can formulate his plan around that. So if only 10% of businesses succeed, this entrepreneur can try 9 more times before the 10 years are up, while the wall street employee is taking his 1 chance over a 10 year period.

If the wall street guy wanted to formulate a plan to do this, he would not be able to because he is controlled by someone else, and they aren't going to let an unproven person take a substantial risk with their money. The way I understand it(with my limited knowledge on the subject), for most people the first few years are pretty laid out for them(during which time they aren't making a large amounts of money), and it's almost like a paid to learn type situation for the first few years, so it's not like many guys are pulling the trigger on big deals fresh out of college.

So if we went even further into the probabilities the comparison would continue to grow further apart in favor of the entrepreneur over the wall street employee because they have a 0% chance of formulating a plan to be out in 1 year, yet the 10% of entrepreneurs that are going to be successful can all formulate their plans around a timeframe of 1 year, they don't have to wait 10, and they can try many times over the course of that time period, multiplying their chance to leave the rat race quickly even further.

 

[imirza]

What are your odds of getting an interview at Goldman Sachs when every degreed finance major wants an interview? And then, once you get the interview, what are your odds of actually getting the job? And then, once you get the job, what are the odds you navigate the corporate landscape and actually ascend into those big mgmt positions? Mulitply each probability and I guarantee you're looking at 1 in 10,000 at least.

If I thought the fastlane strategy was a 1 in 10000, I wouldn't have bothered to write a book -- just go play the lottery or hit the casinos.

No shit. If you walked up to Goldman and tried to get an interview you would stand no chance. On the other hand if you followed a well thought out plan things would be different. Getting a job at Goldman and working up the ladder to a position that allows you to make millions also requires following a well defined set of rules just like starting a successful business does. Follow a well defined set of rules and your probability of getting a job at Goldman (or other wall street firm) and making millions is also 1 in 10 or better. Making millions working on Wall Street is not like playing the lottery. The successful people on Wall Street worked hard to get where they are and have followed a set of rules. No different than successful business people.

 

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[imirza]

To add to this, one thing that hasn't even been added to the equation yet is control. It might not seem like it would effect the mathematics in something like this, but it will further prove how substantially different the odds are of getting into the fastlane quickly in a wall street job compared to a business. An entrepreneur can formulate a plan to escape the rat race in a year.

If he fails 9 out of 10 times, so be it. He can try again the next year and if he fails 9/10 times again he can try again.

However, he has the ability to formulate a plan to exit the rat race in 1 year if he'd like. Someone in a job on wall street does not have the ability to formulate this plan, as their plan will be laid out for however it best benefits the people who control them.

So if we did pretend the wall street guys who made it that far(note: we'd have to also calculate in all the guys who quit because they couldn't take it or were fired, substantially lowering the % of fastlane employees), and we say they're aiming for a 10 year plan to exit the rat race, if we pretend the entrepreneur has the same exact odds, he can still formulate a plan to be out in 1 year. The wall street guy has close to a 0% chance of being out in 1 year. The entrepreneur however can formulate his plan around that. So if only 10% of businesses succeed, this entrepreneur can try 9 more times before the 10 years are up, while the wall street employee is taking his 1 chance over a 10 year period.

If the wall street guy wanted to formulate a plan to do this, he would not be able to because he is controlled by someone else, and they aren't going to let an unproven person take a substantial risk with their money. The way I understand it(with my limited knowledge on the subject), for most people the first few years are pretty laid out for them(during which time they aren't making a large amounts of money), and it's almost like a paid to learn type situation for the first few years, so it's not like many guys are pulling the trigger on big deals fresh out of college.

So if we went even further into the probabilities the comparison would continue to grow further apart in favor of the entrepreneur over the wall street employee because they have a 0% chance of formulating a plan to be out in 1 year, yet the 10% of entrepreneurs that are going to be successful can all formulate their plans around a timeframe of 1 year, they don't have to wait 10, and they can try many times over the course of that time period, multiplying their chance to leave the rat race quickly even further.

If I have no experience or knowledge and decide tomorrow to start my own business, whats the probability I can be out the rat race and in the fastlane in 1 yr or less ? 1 in 10,000 , 1 in 100,000 ? 1 in 1 million ? Not very high. Not saying it can't be done but the probability is very very low.

On Wall Street you pretty much know within the 1st yr whether you are going to make it or not. You won't spend 10 yrs there to discover you are not going to pull in the big bucks. You'll probably be fired long before then. On Wall Street if you are an I banker or trader you are pretty much expected to rake in millions in 5 yrs or less or else you're fired. Having things laid out for you on Wall Street is even better. For a trader execute X amount of successful trades with average profit of X and earn X. For an I Banker close X dollar amount of deals and earn X. And you have potential mentors all around. Guys who are pulling in millions. Watch how they do it and emulate them.

While its unlikely you will make enough money in yr 1 on wall street, in the hedge fund industry you can pull in millions in your first yr. So you can be out of the rate race and in the fast lane after one yr. And the odds are no different than the guy who has no experience or knowledge, starts a business and is in the fastlane in 1 yr.

And I can go into countless other industries. Real estate salespeople pulling in millions of dollars in yr 1 fresh out of college or high school. Any job that has no income cap(mostly sales related) gives you the opportunity to make boatloads of money and get into the fastlane in a very short amount of time. I know people who have retired after 2-3 yrs in sales jobs.

Again I am not saying JOBS are more fastlane than businesses. However, depending on what type of JOB you choose, it can certainly be more fastlane than starting your own business. And most importantly, many people are just not wired to start their own business. Whether to choose a JOB or starting your own business depends on the person more than anything else. People who have marketable skills that companies would pay BIG bucks for would be stupid in most cases for starting a business. Likewise, a person with zero marketable skills whose best JOB prospect is flipping burgers at McDonalds would be stupid not to start a business.

 

[snowbank]

If I have no experience or knowledge and decide tomorrow to start my own business, whats the probability I can be out the rat race and in the fastlane in 1 yr or less ? 1 in 10,000 , 1 in 100,000 ? 1 in 1 million ? Not very high. Not saying it can't be done but the probability is very very low.

On Wall Street you pretty much know within the 1st yr whether you are going to make it or not.

You aren't using any logic in your arguments. You are changing major variables incorrectly. You are now saying the entrepreneur will not know anything about business but the wall street guy is already in his first year on wall street. That's a very different debate.:smxF:

This is like saying that a guy in his first year in the NBA has a higher chance of making $10m/yr from sports than a guy who wants to play in the NFL but has never seen a football before. No one's going to argue that.

You're changing one side of the equation. You'd need to change both sides of the equation to make a logical argument.

 

[imirza]

You aren't using any logic in your arguments. You are changing major variables incorrectly. You are now saying the entrepreneur will not know anything about business but the wall street guy is already in his first year on wall street. That's a very different debate.:smxF:

This is like saying that a guy in his first year in the NBA has a higher chance of making $10m/yr from sports than a guy who wants to play in the NFL but has never seen a football before. No one's going to argue that.

You're changing one side of the equation. You'd need to change both sides of the equation to make a logical argument.

Point taken. So how many years of training and experience will that guy need before he can start a business that will send him into the fast lane in 1 yr or less ? 5 yrs ? 10 yrs ? There is a saying that behind every overnight success is 10 yrs of hard work. Likewise it would take 5 yrs or more to make it big on wall street. 4 yrs of college and 1 yr actual work.

 

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[Kung Fu Steve]

Point taken. So how many years of training and experience will that guy need before he can start a business that will send him into the fast lane in 1 yr or less ? 5 yrs ? 10 yrs ? There is a saying that behind every overnight success is 10 yrs of hard work. Likewise it would take 5 yrs or more to make it big on wall street. 4 yrs of college and 1 yr actual work.

That depends on how many of the 5 fastlane commandments he understands :smxB:.

I am fascinated by the conversation being had here but I think we are missing a critical point. Trading time for money. I know for a fact now that I can make all the money in the world in my business (or job in other cases) but if I cannot develop a great staff to run it without me, I'm stuck. The money will be worthless because I cannot use it.

The new wealth I believe is time (at least for me it is). Money is easier and easier to make the more I understand business and other principals around here.

I think Tim Ferris has it right when he compares relative income to absolute income.

If Suzie works 40 hours per week for 50 weeks of the year and makes $100,000 per year she makes $50 per hour.

If Johnny works 10 hours per week for 50 weeks of the year and makes $50,000 per year he makes $100 per hour.

He may make half the income but he produces way more per hour, and if that $50,000 meets the lifestyle quotient he wants to meet than he is technically 4 times richer because of the time he has to enjoy life.

With anyjob you will always be stuck trading time for money. Even the basketball player making $400,000 per game is still trading time for money. Same with the Wall Street exec. I do not believe there are any exceptions... If there are any exceptions I would be glad to hear them, I'm sure open minded!

 

[snowbank]

Point taken. So how many years of training and experience will that guy need before he can start a business that will send him into the fast lane in 1 yr or less ? 5 yrs ? 10 yrs ? There is a saying that behind every overnight success is 10 yrs of hard work. Likewise it would take 5 yrs or more to make it big on wall street. 4 yrs of college and 1 yr actual work.

A question like that isn't something that can be answered. On something like that there's going to be an infinite number of variables involved, in which both sides need to be balanced at all time to make an accurate comparison.

Things like this we need to be evaluated in a vacuum. For example, if we assume we gave 18 yr old identical twins 2 blueprints- these twins had learned everything the same at that point, and assuming they had the same chance of being successful at trading or business. One blueprint was for business. The other blueprint was for trading. Based on the information that's available, the guy with the business blueprint will blow the guy with the trading blueprint out of the water if we are measuring how fast someone could escape the rat race if that was their goal.

Evaluations like this need to be done assuming all else is equal to be accurate. If all the sudden we had new information that said 20% of wall street traders were making $5m after 1 year now, that variable would drastically change the equation. All decisions can only be based on what is currently known. Based on the information I currently have, this wouldn't be a close comparison if we are talking about the speed of a possible exit.

In my own personal situation I knew that I wanted to leave poker. I looked at a lot of options. Trading was at the top of the list for things I was looking into. My specific goal was to get in a situation quickly where I wouldn't have to work each day to make money(escape the rat race), and from the due diligence I did I determined I'd get out quicker in business than in trading.

If I had known someone high up at Goldman Sachs my decision might have been different because then I could have had a faster route in that field, but having no one to personally speed my growth at either trading or business, I chose business because of it's speed.

I'm in 100% agreement with you that overnight success doesn't usually happen overnight, in trading or in business. Most entrepreneurs are reading business books out of interest for years before they actually start one, and most traders are usually reading books about trading for years before they get to wall street.

 

[Denim Chicken]

Geez, as a 23 year old entrepreneur who's just getting started in online business and real estate, I learned so much in this thread. Read the entire 4 pages twice!

Snowbank, you take any proteges or mentorships via email?? I got potential. :smx19:

 

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[Hawk07]

This is EXACTLY what is my Hurdle!!!

Everyone

I very much appreciate the discussion on this topic....is real estate fastlane....that has become which is faster/better....real estate or start a business (preferably internet). This is EXACTLY what has been my roadblock!!! You see, I am a full time employee who works an awful lot...and basically has a job where I do not have set hours (on call all the time). With such a limited amount of time and without knowing my schedule from day to day it is difficult to choose my exit plan.

My options are as follows:

1. Start with single family residential flips (buy low, rehab and sell): I will do this to generate capital to invest in commercial properties (mh parks and/or apartments). I know the real money and appreciation is multiplied with more units. I have helped remodel certain parts of my homes but have never done a rehab before, so working with contractors, etc will all be new to me and there will be a learning curve. It may take more work and time at first, but it is eventually able to be scaled to a certain degree if you replicate your rehab materials/workers/etc.

2. Start with commercial deals. I am mostly interested in investing in MH parks and apartments....mostly MH parks though. But, what is holding me back? CAPITAL! If I found a solid deal on a 80 lot park for say $800k, where am I going to get the money to put down...160k or do a seller carry back for $80k...so my down stroke is still $80k. These are the deals that you can only find one deal and you are out of the rat race....JUST ONE....and I know this. Do I go straight into this and try to find one deal and partner with a money partner?? It seems to make sense to me...why play small ball if you know its just a means to an end? Im ready now.

3. Internet based business. I have a pretty good idea of a business that could definitely be scalable and which would benefit a whole lot of people. It will be based off a technology that is soon to explode. I can see the benefits and how it would work, but of course i HAVE NO Internet experience or website building experience. I would not even know who to approach to help me launch the site. I do not need to know everything about websites and marketing....as I can hire people to help me with that....but I do have a solid understanding of the underlying players on the business side of things. At the same time, I have a couple of acquaintences that do have some MAJOR successes with starting, running and selling internet companies to conglomerates that take them public. Do you approach those friends right away and say....hey, I have an idea....or do you try to develop idea and then approach them?

***With my limited free time and unscheduled work commitment***the internet based business is attractive because I can work on it from my home...at any time....anywhere...so it will fit with my schedule. The rehab business would demand more outside time/travelling/managing from different areas...so it would be hard from that viewpoint. The commercial business could be worked from home in terms of marketing...evaluating deals....offers....etc until it came time to do due diligence on the parks....then I would have to travel and spend alot of time in the park and looking at the financials/inspections/etc.

FOCUS - I am looking to determine which path to take. Once the decision is made, I will focus 100% of my allocated free time on the project. What do you say?

DO I

1. Rehab business - find, fix and sell?
2. Commercial investments - find, contract, partner or seller carry?
3. Internet Based Business - Plan, delegate to experts, manage and grow business

Internet business and Commercial has the biggest bang potential no doubt as the rehab biz is just the means to get into Commercial. But, the internet business, would provide the ends itself.

You guys are the experts as you have all been successful in one of these areas.....I would like your opinion......I will choose my path and report my results as I go along!

Now, what would you do?

Hawk

:coolgleamA:

 

[sswift]

if you dont have capital or experience in rehabbing or commercial, why not start off by wholesaling properties to stack some cash. After you flip a couple houses/commercial, then you can start rehabbing yourself. You can even ask some of the investors you worked with while wholesaling to help you rehab your first couple properties! I would also recommend that you create a landing page (lead generating) website to attract motivated sellers. While doing this, you are also learning web-design, so that once you have capital, you can make other websites for your other business ideas.

 

[snowbank]

Snowbank, you take any proteges or mentorships via email?? I got potential. :smx19:

Haven't before. Jazzfreak will be my first; he'll be interning for me this summer.

 

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[Kazarian]

What an excellent thread. This is great for a person who is looking to get into the fastlane and one who has researched both of these avenues.

I, myself have carried out a lot of research and have decided that the best route for me is to start an internet business. I am currently very busy with my consultancy job so I needed an avenue where I could conjure up a business in my spare time (late evenings and weekends). I also like that fact that if my first attempt fails I can get up and try again (and again and again and again....) until I succeed!

I am hoping (when I have enough posts to do so) to start a thread where I will look for some insight into two options within the Internet business sector but until then I will stop the hijack of this thread. Once again, a very very useful thread.