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Mainstream media and TV production companies have one nasty habit — taking an industry and romanticizing and accentuating all the wrong things about it. And the latest industry they are tearing apart is real estate. While real estate reality shows occasionally may get some things right, Justin Giles points out that these fancy shows create a wrong picture of how things are done in the industry.
"It's not hard to become a successful real estate investor if you follow the right rules. Newcomers are prone to falling for the charms of the shows," says Giles. "They'll watch all these fancy shows that paint a picture of lavish renovations. When they start their careers and try to build their brand based on those overrated shows, they inevitably fail because they are over improving their projects. They must learn to separate TV land from reality."
Real Estate Mentor, Business Coach, Book Author and TV Show Producer
Justin Giles is a seasoned real estate investor with over 17 years of experience in the industry who wears many hats. He was there when the real estate bloomed in 2006 and weathered the 2008 collapse. Besides being at the top of the real estate industry as an investor for almost two decades, Giles is a mentor and book author who teaches others how to achieve success in life and business.
From students like full-time truck drivers to high-performance athletes and basketball stars, everyone is looking to grab a piece of advice that Giles is offering through Real Estate Gurus, his non-profit, the Top Fund Project, and his two books.
Among his coaching success stories are Olympians and professional athletes. But to Justin Giles, every mentee is equally important as his goal is to transfer as much knowledge and experience to anyone who comes asking.
"I have over 500 people that I mentor. Many end up quitting their jobs. Most of my mentees are now making crazy amounts of money in the real estate business. Some of them are rich sports stars, but my strategy works on any scale," he says. "You don't have to have a million dollars in the bank to make it work. Something that I learned by getting through the 2008 financial crisis."
On top of that, Giles will soon be releasing a TV show called The Money Play, which will feature entrepreneurs that come from different walks of life who will share their success stories and teach people how to make money.
"It's a brand-new show where we're teaching people how to make money," he explains. "We will have entrepreneurs who will share their experience and strategies. And every episode will have a takeaway on how you can create a business using the strategy that the entrepreneur on the show was talking about."
But what about Giles? What is his success secret? As he reveals, it was the fiery baptism of the 2008 economic collapse that tried and tested every ounce of his knowledge, strength, patience, and willpower.
Still, he persisted through all downs and capitalized on the industry's ups, thanks to his willingness to put in the hard work. And while he points out that the more you work, the more it pays off works like a charm in most situations, there is an exception to this rule. And in real estate, the exception is property renovation.
Too Much Money Isn't Always a Good Thing
Giles explains that many people, especially inexperienced ones, fall into the trap of over-improving a property they want to flip. The rule of thumb for making money in the real estate industry is simple — don't put too much money into the house.
Giles adds that investors often decide to put in the fancy backsplash or marble countertops in the property that didn't even need granite. The result is losing money on the property sale, as there is no way to get the wanted and needed return on the unnecessary over improvement.
"If the neighborhood calls for a house to have beautiful granite countertops, tile floors, and grand light fixtures, great. But that's a luxury home," he says. "However, if you're dealing with a more affordable home, you must go with more basic things. You don't need all the extra lavishness. You don't want to paint a picture for somebody. You just need to give the buyer a canvas, as they are the ones who will paint their picture and their vision."
You Don't Like the Property? Buying It Is a Cardinal Sin
Another mistake that rookies and some experienced investors make (although Giles can't believe they made it that far) is dealing with properties they wouldn't live in themselves. They dislike the neighborhood, house structure, location, and/or anything about the house. They only buy the house because it's cheap. But for Justin Giles, buying these types of deals are big mistakes. They would be better off, buying a property that is more expensive, that needs less work in a better area. This will allow them to do volume. When you do volume, your cash flow will scale quickly.
"You see the property going for 150 grand. But, and big but… you don't feel comfortable with your daughter even riding her bicycle up the street because you believe it's a bad neighborhood. You wouldn't want to live there," he says. "And if you buy property there, you will get a renter you don't want to deal with, and you won't be comfortable. You can't buy a property solely based on the numbers."
This advice could be a wake-up call and reality check for many struggling real estate investors. Overinvesting and buying cheap properties people are uncomfortable with is undoubtedly not the way to earn money — which should be the main point.
While there are many ways to ensure success, in the spirit of the last two pieces of advice, Justin Giles points out that balance is the key in real estate. "Real estate investing is an art form, and the key to success lies in measured actions," says Giles. "Every property can be a masterpiece and sell for high profits if you know when to push hard and when to have a light touch; when to invest in renovation, and when to hold back."