A comment John T. Reed makes is that if you’re unable to look a grown adult in the eye, listen to them passionately argue why you should do something, then say “No” to them, you shouldn’t be a real estate investor. It’s an easy thing to hypothetically say “sure, I’d just say no”, but the reality can be much harder.
Beyond real estate, this holds true for almost all investments. My grandmother got pulled into mutual funds when she got talking to an investment advisor years ago. No one in the family believes for a second that she understood what she was purchasing. We’re all happy that they worked out OK for her (although she had one fund that’s been averaging about 0.5% for the last 5 years), but she invested because she couldn’t say “No” to the guy trying to sell to her. NOT because she thought it was a good investment.
Some time ago I rented a room from a friend of the family. He and I got talking when I mentioned that I was interested in learning about real estate and would like to take him out for a beer and pick his brain sometime. One thing lead to another, and once he’d figured out I had some cash, he wanted me to loan it to him. Hesitantly I told him I’d consider it if he provided me with full details about his financial situation and credit history (including his credit report) and let me discuss it with a friend who was a banker. A period of time went by and one day he left me a message saying his lawyer would contact me to arrange the money transfer. After I couldn’t get in touch with him, eventually the lawyer called me and I told him I hadn’t been given the paperwork I needed for the loan. Things heated up when my landlord demanded the loan, threatened to end our “friendship” if I didn’t go through with the deal (without any of the paperwork he’d promised to provide) and eventually he evicted me. This actually created a conflict with the family member I knew him through and we no longer talk (my family member or the landlord friend).
Saying “No” can be tough, especially if you have a sweet, sensitive soul like Mr. Cheap.
Multi-level marketing schemes (such as Amway) are built on it being hard to say “No”. People pressure their friends, who join and get indoctrinated into pressuring more people to join. Most people wouldn’t be interested in the “opportunity”, but having a friend or family member passionately trying to convince us, it takes a strong heart to listen to them out, smile and say “No thanks”. When someone you care about starts getting angry that you aren’t agreeing with them, a little voice in the back of your head always seems to chime in “why not just go along with them?”.
A blog post I read sometime back (can’t remember the site or I’d link to it) detailed the difficulty the blogger had in being the heavy and telling her tenants that they couldn’t have a party. This is part of being a landlord, and if you can’t hack it, stick to ETFs.
I love to learn about new investments and business ideas, but it’s tough to talk to someone about it for a while than say “thanks for the info, but I’m not interested”. I’ve had people get quite upset with me when I wasn’t interested in being a part of their business venture (and they got even more upset when they pushed and I explained the problems with their business and why I wasn’t interested). Venture capitalists love to say to people that they “aren’t ready to invest right away but they’d love to talk to the principals when they get the business more developed”. Newbies don’t realize this is a nice way of saying “No”.
Most of the bad financial situations I’ve gotten into in life, I had a bad feeling going into it, but just found it too hard to tell the person “No”.
What have you said “Yes” to and immediately regretted? Has anyone gone from being a “Yes (wo)man” to a “No (wo)man” and how did you do it?