Thanks in advance for your tolerance of that title. 
We all know the difference between the two. The novel allows for nuance, character development. a plot with more breadth and depth than a short story. This isn’t to say short stories aren’t fun to read, or entertaining. They don’t generally have the depth of character and plot development requiring time — and pages.
So many investors mistake some sort of quick buy low, 
sell high, short turnaround real estate deal for investing. There’s not a thing in the world wrong with quick profits — let’s not call it investing. Flipping — can’t tell you how much I loathe that word — are short stories. You have an hour or so, take a short story into a Starbucks, and while drinking your 24 letter version of coffee, you start and finish the story.
Tell me the short story measuring up to a classic novel. There are great short stories, but the best short story, please pardon the mixed metaphor, can’t carry the jock of a pretty good novel. In any 20 year period, flippers, or rehabbers, just can’t keep up with long term investors. At least in my 38 years of looking, I’ve never met one. There surely are exceptions — who by their very existence merely prove the rule.
Over the long haul, real estate short stories become jobs by nature. What the heck does he mean by that?
Let’s create a normal market in a growth region for ourselves. We will have a normal market again, won’t we Dad? This means by definition we’ll be leaving San Diego.
Our market goes up 6% yearly for five years. You invest $50,000 into half a million of income property. After all sales costs, your original $50K is now $192,000. You take that and acquire $1.5 million in more property via tax deferred exchange (1031). Sometimes it takes less than five years, sometimes more.
BawldGuy Axiom: It takes what it takes.
That’s the long term novel approach. It builds. 
There are subplots — some good, some not so good. Every now and then there’s a plot twist — an upward spike in appreciation — tenant problems — a gigantic market correction. Stuff happens. (heavy editing) Some novels have mysterious endings, some happy, and some are just plain irritating. Most novels written by long term investors, have predictably structured endings, arrived at on Purpose, through constant Planning and vigilance.
We call this Purposeful Planning. It takes a lifetime to read, but it’s well worth it. A well constructed Plan might include visits by Murphy, blind luck, three years of 20% appreciation, or 4% interest rates. The ending though, because it’s a novel, has a far better chance of a happy ending, because — you’re the author.
Now, let’s look at the short story connoisseur. Ironically his story is short, repeated over and over and over ad nuaeum — until the inevitable happens. He trips or stumbles. 
Thousands around the country now know the short story approach can end abruptly. Many of them end up back back where they began — some worse. They learned the hard way — real estate isn’t Monopoly.
What they realize is the quick profit is ok, but long term, it becomes a job. With more punitive taxes, no long term compounding benefits, no tax shelter, and, like a great white shark — the need to constantly be on the prowl for fresh prey.
That quick 40 grand turns into a quick 28 grand faster than you can say April 15th. And so it goes.
The author of the novel? It usually tells a saga covering 10-35 years — telling many short stories on the way. Those short stories are merely chapters in their novel though, and merely links in the bigger story — that almost always has a happy ending.
What kinda novel do you want to write?
Related posts:
- Sometimes Incredible Things Happen To Those With A Plan — A True Story
- Retirement Through Real Estate Investment — Constructing The Plan
- Your First Real Estate Investment — Often The Most Critical
- Retirement Income –Real Estate Investment — 1031 Exchanges — Purposeful Planning
- Real Estate Investments: What Your Broker Should Know
About BawldGuy
You mean to say all those House Flipping shows that show people flipping a house in a month and make thousands of dollars is wrong??? I am shocked…
Great post. As a caveat, I did use house flipping to get the start up cash I needed for real investing. If you can find one or two, they work well for that purpose, but certainly not a long term career. Talk about opportunity cost and taxes… Give me a 20 unit apartment building and 90% leverage (if I can still get it) any day.
You hit on a positive use of flipping — if you can be successful outa the gate.
I’d love to talk with you about the 20 unit apartment building vs owning several 1-4 unit buildings as a long term strategy.
Either way, you’re miles ahead of 99% of the flippers out there.
Those TV shows have caused more pain for uninformed regular folks than almost anything I can think of.
In a stable or growing market, buying homes wholesale, fixing them up and selling them retail, can be a good “job” for a licensed contractor / licensed real estate broker.
For the average Joe, with no contracting background or real estate expertise, it can be extremely dangerous.
As with any job, a portion of the profit from each successful sale should go towards long term investing. This could be in real estate, stocks or any other long term wealth building asset.
So many of the flippers I have seen in my area parlayed each flip into the next. There was no investing involved, just double or nothing bets until they lost. They did pull out some of their profits to “invest” in ski boats and rims for their lifted trucks.
They were not so much writing short stories as they were writing a series of poorly written comic books. Unfortunately, in the end of most comic book series, the hero dies.