Lessons from 20+ Years of Investing
With over 20 years of investing in real estate and transactions in the billions across thousands of projects, I’ve come up with my list of five do’s and five don’ts of real estate investing.
If you’re planning on investing in real estate, definitely take note. Because if you do these things, you’re going to win. And if you do these don’ts, you’re going to lose.
Let’s dive in.
THE 5 DO’S
Do #1: Educate Yourself
If you’re going to invest in real estate, you should try to learn everything you can about the space.
Here’s the good news: There’s not a ton to learn about real estate, but there’s enough that you need to get out there and educate yourself.
What Should You Educate Yourself On?
| Resource | Description |
|---|---|
| Books | Great real estate books are out there |
| Courses | Take courses to learn the fundamentals |
| Mentors | Hire experienced investors to guide you |
| Networking | Meet other investors in your area |
| YouTube | Watch videos from experienced investors |
💡 Key Insight: There’s a very popular saying that knowledge is power. I don’t necessarily believe that. I think that taking action on knowledge is power. But you can’t really take action until you’ve educated yourself. So they really do go hand in hand.
Action Step: Google your local real estate associations. This is where groups of investors, Realtors, and flippers get together and say, “Hey, we’re all doing deals. Let’s meet each other, connect, and maybe we can do deals together.”
Do #2: Set Clear Goals
Define your investment objectives. Ask yourself: What’s important to you?
When I started investing in real estate, I set out to find the best strategy, but I had to know what my criteria was.
My Criteria:
| Factor | My Priority |
|---|---|
| Least time | I was a full-time student and had a full-time job |
| Least effort | I wanted it to be easy instead of hard |
| Least risk | I wanted to know it was going to work |
| Most profit | Pair the above with maximum returns |
These clear objectives led me to my strategy: buying single-family homes below the median in top markets, completely passive for short-term buy and hold.
The Results: On the last 2,400 homes I’ve done in the last decade, I’m averaging over 60% annual ROI.
💡 Key Insight: I’m killing it because I set clear goals and I knew exactly what I wanted.
Do #3: Research the Market
Buying real estate is about understanding historical facts and figures.
The Power of Comparables (Comps)
My very first house was built in the 1940s for $5,000. By the time I bought it in the early 2000s, I purchased it for $110,000 — even though it was worth $150,000.
I bought it $40,000 below market because I did my research and used comparables.
💡 Key Insight: The research said, “Hey, here are homes in the neighborhood that are all selling just like this for $150,000, but you’re getting it for $110,000.” That gave me confidence in buying a steal of a deal. The numbers made sense.
What to Research
| Research Area | Why It Matters |
|---|---|
| Path of progress | Where is your city growing? |
| Tenant preferences | Where do people want to live? |
| New developments | Master planned communities? |
| Market trends | Newer vs. older properties |
💡 Key Insight: It’s all a numbers game at the end of the day.
Do #4: Build a Network of Professionals
If you’re going to be a real estate investor, you want to have:
| Professional | Role |
|---|---|
| Experienced lenders | Specialize in working with investors |
| Investor-focused agents | Find good deals for investors |
| Private money lenders | Provide cash for repairs or flips |
| Successful investors | Partners for projects and deals |
💡 Key Insight: They say that your network is your net worth. That’s very true in the game of real estate. There’s always a way to work together.
I’m part of thousands of people’s networks. That’s why I’ve done over a billion dollars in real estate.
Do #5: Perform Due Diligence
After the property’s under contract, you definitely want to make sure you continue doing your due diligence.
This is different from research to find the right deal. Due diligence is: “I now have it under contract. I’m planning on buying it next month, and I need to be very thorough on my inspections.”
What Due Diligence Includes
| Activity | Why It Matters |
|---|---|
| Inspections | Find foundation problems, roof issues, etc. |
| Financial review | Confirm interest rates and cash flow projections |
| Property walkthrough | Visit the property with an expert or coach |
| Paperwork review | Dot your I’s and cross your T’s |
💡 Key Insight: The last thing you want to do is buy a property and a month later discover it has foundation problems costing $20,000 to fix that you didn’t inspect for.
THE 5 DON’TS
Don’t #1: Don’t Rush — Avoid Impulsive Decisions
Some people get excited and think, “Oh my gosh, I’m so excited to follow Kris’ advice. I want to be a real estate investor. I’m just going to go buy a property.”
Don’t do that.
You want to buy a good property. You want to buy a property that’s going to make you money.
💡 Key Insight: Slow down. Take your time. Do your research. Analyze the properties. Don’t feel pressure to buy your first property. That patience allows for better negotiation tactics and more informed choices.
Don’t #2: Don’t Make Emotional Decisions
This is a numbers game, not a feelings game.
Where do feelings belong?
| Appropriate | Inappropriate |
|---|---|
| Motivation to succeed | Evaluating a deal |
| Desire to provide for family | Bidding wars |
| Drive and passion | Falling in love with a property |
💡 Key Insight: If I don’t see a really high profit margin, I ain’t doing the deal. Emotions tend to cloud your judgment. Stick to the objective criteria.
My personal story: I once bought my first car on eBay without telling my wife. I got in a bidding war, emotions took over, I bid higher and higher, used all her money, and ended up with a car I didn’t really want. It cost me thousands of dollars.
Moral of the story: Don’t fall in love with the property. It’s an investment project. You’re buying it to do one thing — make you money night and day, even while you sleep.
Don’t #3: Don’t Over-Leverage
Don’t borrow too much. Don’t stretch your finances too thin.
Maintain a healthy debt-to-income ratio.
| Rule | Action |
|---|---|
| 40% rule | Banks will lend on up to 40% of your income on debt |
| Buy below median | I only buy homes below the median by about 30% |
| Avoid expensive homes | When the market turns, expensive homes lose more value |
My average purchase price: $230,000
National average median: $430,000
I’m buying significantly below the median to make sure I am never over-leveraged.
💡 Key Insight: There are a lot more people looking to rent properties in the entry-level single-family range than million-dollar houses. Avoid the expensive stuff because when the market turns, you don’t want to be holding the bag on a property that just lost a ton of value.
Don’t #4: Don’t Neglect Property Management
A lot of people get lazy: “I bought a property. Now I hope it’s being managed well.”
No — you definitely need accountability.
Your Options
| Option | Best For |
|---|---|
| Self-manage | Saving money, but requires time and skill |
| Hire professionals | If you know you’ll cut corners, hire experts right out the gate |
How to Hire Property Management
| Do | Don’t |
|---|---|
| Hire a company managing hundreds of homes | Hire a “mom and pop” shop managing 10 houses |
| Tap into established systems | Rely on inexperienced managers |
💡 Key Insight: Larger companies have already licked their wounds and made their mistakes in the past. Now you’re tapping into a more professional property management company.
My Experience: I had 25 lease options before I brought property management in. Even though lease options are easier to manage than straight rentals, it just got to be too much for me, so I hired it out.
Don’t #5: Don’t Just Focus on Cash Flow
There are a lot of short-sighted investors who think: “I want to buy this property, get a mortgage, rent it out, and make positive cash flow.”
Dude, I get it. On my very first rental, I made $600 a month and averaged about $500 a month on every property after. With 25 homes, that cash flow produced $12,500 a month.
But here’s the thing:
| Income Stream | Percentage of Total ROI |
|---|---|
| Cash flow | 3–7% |
| Appreciation | Much larger |
| Principal reduction | Significant |
| Tax benefits | Significant |
💡 Key Insight: Cash flow is a tiny part of all the money you really make on a deal. On our last 2,400 homes, we’re averaging over 60% per annum on our ROIs. The cash-on-cash represents maybe like 3–7% of that.
Don’t let cash flow keep you from getting in the game. You’re only going to make a tiny bit of money on cash flow compared to all the money you’re going to make on all the other ROIs.
Summary: The 5 Do’s and 5 Don’ts
| Do’s | Don’ts |
|---|---|
| ✅ Educate yourself | ❌ Don’t rush — avoid impulsive decisions |
| ✅ Set clear goals | ❌ Don’t make emotional decisions |
| ✅ Research the market | ❌ Don’t over-leverage |
| ✅ Build a network of professionals | ❌ Don’t neglect property management |
| ✅ Perform due diligence | ❌ Don’t just focus on cash flow |
Final Thoughts
I’ve been in the game for two decades and I’ve done thousands of deals. If you want to play at the highest level and literally have a shot at the highest profits available:
- Educate yourself — but more importantly, take action on that knowledge
- Set clear goals — know exactly what you want
- Research the market — let the numbers guide you
- Build your network — your network is your net worth
- Do your due diligence — protect yourself from costly mistakes
- Avoid the don’ts — rushing, emotions, over-leverage, neglect, and narrow focus
By the way, if you follow these principles, you can buy enough real estate to never have to pay taxes ever again. The tax benefits can be monstrous.
Ready to start your real estate investment journey? learn about partnering with experienced investors!
Disclaimer: This article is for educational purposes only and does not constitute financial, investment, or legal advice. Always conduct your own research and consult with qualified professionals before making investment decisions. Past performance does not guarantee future results. Individual results may vary.
