Originally Posted by
Gunfighter
Airline pilot travel schedules make hands on landlording a difficult task and poor choice in most cases. When you consider the hourly/daily pay rate in our profession the opportunity cost of working "in" your business instead of "on" your business is too high. It is far better to hire/delegate the hourly tasks. This can be problematic in the SFR space, although not impossible. I've met several out of state investors who BRRRR their SF properties. It takes education, networking and a fair amount of trust.
Understanding the value of your time both quantitatively and qualitatively is a key factor in successful real estate investing while working a full time job. Over the last few years, I've put considerable effort into separating which tasks I should do, which tasks I should hire and which things shouldn't get done. Going through that exercise will shape your investing approach. The only SFR I've done in the last decade was a hands on training exercise for my daughter. The ROI on money was high, but the ROI on time was insignificant. The value was in working with my daughter.
SFR is the domain of middle class workers aspiring to me millionaires. It is a great place to start and a good option for early career airline pilots. 30yr fixed rate financing contributes to the low risk nature of this asset class. Mid career pilots well into six figure incomes should consider being LPs in larger commercial deals or direct owners of larger properties like storage facilities, RV parks, apartments or NNN commercial property. Financing on larger properties generally isn't as safe as the 30yr fixed rate mortgages available in the SF space, so you need to learn and DYODD far more than SF. My personal RE portfolio looks nothing like it did as a new hire because as income and net worth increase the ROI on time becomes more of a factor than ROI on money.
I agree with almost all of NuGuy's assessment. Even though RE is a LONG game, it's a much shorter game than index funds in a 401K. You can build a retirement income in 10 years vs 30.
While this timeline can be true, it requires more time and education to perform the due dillegence bercause the consequences are high if you don't. The index fund is reliable and completely free from time and effort consumption. Once I got to the realization that my SFR investments would never yield anywhere near the value of my time, I was at an inflection point. While there are opportunities for commercial deals and larger properties the learning curve can be steep and costly. You really have to be all in at that point and operate as a business. Lack of knowledge and failure to comprehend all aspects of a deal have cost me. I got burned and realized my education was lacking, and the time and effort to gain that knowledge was a greater commitment than I was willing to make. This isn't an argument with your RE investing but a warning to those who might consider the next level from SFR when their time becomes the trigger point. The 10 year investment timeline still requires a great deal of time commitment but it centers around learning the business and deal structures. Admittedly, it was too much for me. The SFR world was a great start but transitioning to a passive investor took me back to equities. DYODD indeed and know that it will be time consuming.