Never Neglect Due Dilligence.
Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
Proverbs 13:11 ESV
It’s a story as old as time itself. The promise of easy money morphing into fools and their money parting easily.
Dani Widell was the Queen of Airbnb. Her kingdom was in Tulsa Oklahoma. Riding high on the post pandemic wave of Airbnb travel, it seemed like Dani Widell had the magic touch and every real estate investor wanted in.
The pitch was to buy housing units at around $75,000 and turn them into Airbnbs. The potential daily rate was $117 per night. Hit 75% occupancy and you could gross $30,000 per year.
Of course, managing an Airbnb is intimidating to the inexperienced and uninformed. Not to worry, Dani Widell had the answers. Ms. Widell would take 25% of the bookings and handle all the details. What could go wrong? The Dani Widell seminars were well attended.
Dani Widell was an accountant turned small time real estate investor before riding the Airbnb wave. She claimed to have nearly 100 Airbnb listings. She made the cover of Tulsa People Magazine. Tax returns reflected over $1 million in annual bookings. Her services included furnishing the units and handling guests and housekeeping. For investors, it was easy money requiring no expertise or dirtying of hands – or at least so it seemed.
In 2023, it all unraveled. Airbnb listings saturated the market. Employees went unpaid. Creditors cut off services. Even her marriage imploded. There were improprieties with misallocated bookings. Investors weren’t getting their money either.
It’s a hard lesson often relearned. There is no such thing as easy money. You can’t outsource expertise. There’s a reason why it’s called due diligence.
Often, real estate investing seems appealing to the uninitiated as a more attractive alternative to the job they hate now. Certainly, if you are unhappy with your career, there is nothing wrong with looking for greener pastures. But if real estate investing is just another way of making money that you don’t really enjoy, know this – you will compete against people that do enjoy it.
What does it look like if you enjoy real estate investing? I can’t speak for everyone, but as someone who loves real estate, allow me to share.
I find looking at buildings recreational. Even when traveling for leisure, you might find me on the architectural tour. It’s common to get excited about a new locale and the potential investing opportunities. On a recent trip to Miami Beach, it was painful to drive down Meridian Avenue. This street is a tree canopy shaded wonderland of art deco apartment buildings lining either side of the road. The architecture is wonderful, yet these buildings are underdeveloped. The owners don’t understand what they have. I wanted to buy everything!
I had the same experience in Tucson. Downtown Tucson hosts a University of Arizona campus. One of the most proximate apartment complexes to the university is a white stucco facility with a white stucco masonry fence. White paint must have been on sale – a few years ago. The white paint shows some dirt and age. Just a desert color palette alone would reposition this gem. Where are the clays, the rusts and the desert yellows? Again, I wanted to buy.
I think about real estate all the time. I automatically process news reports in terms of how the events will impact real estate.
And I don’t think of any of it as work.
I’ve reached retirement age, but I can’t imagine retiring. I enjoy a nice walk, but why ruin it by chasing a little white ball? In the unlikely event that my golf handicap would ever be something to brag about, how does that compare to the impact I can have investing in real estate?
It’s this way in whatever lane you occupy. The folks that are on top of their game in any profession are the ones enjoying it the most. For me, real estate is fun. The financial rewards are an added bonus.
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