How to convince a friend of property investment

Agreed. I've got 4 close friends/partners younger than me, between 27 and 30 who are each worth between $4-$10/15m anD they all rent and have no property investments or interests for now.

One of my unofficial mentors is an amazing investor and deal maker and all he owns resi wise is his PPOR, the idea that everyone must buy a house/apartment and rent it out is pretty backwards imo, the fact that it's the path of least resistancr/default option for many yet so few retire handsomely from it tells me it isnt all roses imo

 

Your absolutely right. That's why i couldn't just play the 'waiting for CG game' and wanted to utilise a strategy that could really speed up the wealth building. In all seriousness if someone had say 3mil, what would you recommend besides property to do with it mate to further build wealth. .?

 

This attitude that if you don't invest in property, that you're ignorant, really gets up my nose. I wish to God I'd not invested in property, and I'd be much wealthier than I am now. I'm OK with accepting the consequences of my choices, but it's naive to believe that you either want to be wealthy and invest in property, or you are ignorant / don't plan financially and don't.

It's much more nuanced than that.

 

@Perp i agree property is not the only vehicle to create wealth, but its quite a significant one. Many of the world’s millionaires and billionaires either made their wealth and or hold their wealth in real estate. I actually had the article that quoted the stats.. but cant find it now. I do agree it’s definitely not the only vehicle...but personally I don’t think it’s one that can be ignored especially when using certain strategies tbh. Just my opinion though.


I am wondering why you wished you never invested in property mate...?

 

Because we lost a butt-load of money, mostly through bad luck. (Conveyancing error.) Doubled down by trying to work our way through it instead of cutting our losses and running - which we did because so many people say that "property always works out a good investment in the long run".

Not necessarily.

We've bought and sold maybe a dozen properties. Most made money. But overall, we're multiple 00s of K worse off than if we'd just stuck our savings in an index fund.

I'm not looking for sympathy - we're OK. But there are plenty of reasons to think twice about investing in property, other than ignorance. The success stories get a lot more press than the others.

 

@JDP1 how old is your mate?

 

My tip - you don't!
It's not you job to convince anyone of anything just because it's working for you.
Allow him the freedom to choose anything he wants.

 

That really sucks… I can empathise for sure mate.

 

Hi Leo... here's Perp's amazing thread...
Perp
Jaw dropping for all the wrong reasons

 

Don' waste your time on this.

Move on with your life and let him make his own decisions.

If he shows interest later on; then you've got a hope.

 

@thanks @Gockie . Read it now. Dont know if i would have made it back from that **** experience...good on you @Perp with the law degree!

 

Hard to say, all depends on their goals, risk profile, experience, competence etc.

What i might do with 3m could be vastly different to what someone else does with it and both could be the right way forward for our respective goals /ambitions

 

You are not the only one Perp.
In my profession I see lots of people losing money on property and when markets turn investment properties are dumped on a huge scale. People fight to keep their family homes (even they go too sometimes) but investment properties are off loaded quickly. Mostly to service debt not for a good lifestyle. I sold 15 properties a few years ago for an investor on this forum (well SS), he does not post any more and will not ever invest in property again. We sell properties for investors often enough to know that people constantly lose money if it is not structured correctly for their circumstances.

That is also why the question "how many properties do you have" and the phrase "sophisticated investors own more properties" does not make sense. How do you actually know someones financial circumstances and whether it is beneficial to them to hold more than 3 properties?

Some people are better off with one and some people can hold 10 with no problems, everyone is different because everyone's finances, starting points, age and ability to service the debt is different.

 

I did not necessarily mean that if one doesn't invest in property, they are doomed. My point was about wealth creation in general. For me the vehicle is property. For others, it may be indexed funds, shares, etc. I appreciate and respect any proven vehicle for wealth creation.

 

Trying to convince him may very well come across as criticism so tread carefully there. It might sour the friendship. Rather than tell him what you feel he should do, perhaps either consider leaving him be, or occasionally tell him snippets of things you're doing. Little case studies if you like. If it turns out to be something that interests him, he'll ask questions.

 

My personal opinion, it’s like anything. The clued up, knowledgeable, focused, full of contacts, highly proactive, on the ball, resilient mindset (whether you want to call that sophisticated or not), it has been my experience and from what I have observed over the years that those types of property investors (and investors in general) do best and get the best results.

Just my opinion though.

 

@JDP1 : Like the other said, don't waste your time. In fact keep your mind open, who knows your friend make more money from share. If that the case, you can learn from it too

 

This is why I love this forum, so much balance based on real life experience.

 

I love this Zach - we can all learn from everyone.

 

By way of update, I have stopped trying to convince him to invest in property.
He has seen me make decent money in a fairly short time via property ; he however he has no interest in any kind of RE anywhere. He does not own any RE currently, and would rather fool around in stocks hoping for penny shares to come out with revolutionary blockbusters that could see his holdings go up thousands of percentage points a-la internet stocks back in the day. So far no luck for him ( bit of the opposite I would say)...nevertheless, he remains convinced his penny shares will hit the jackpot someday, and he then plans to sell and use the proceeds to buy RE at that time.