Is landlording the way to go if you are starting into real estate investing today?

Receiving cash flow from rental residuals is an exciting idea. If the rental housing is congregated in large apartments within a focused area, the costs of management and maintenance are more economical. Rentals are even more appropriate when all of the portfolio is in the "path of developmental progress" with "upward mobility" population of a prime metropolitan city. This results in clustered landlording of an area free of crime, prostitution and drug traffic. However, whether purchasing large quantities of these apartment complex units as fix-up properties or pristine properties, acquisition usually demands deep-pockets and is not within the cash range availability of the beginning real estate investor. Therefore, I suggest such acquisition of these larger apartment properties after some experience in real estate investing has resulted in a big wad of cash in the hip pocket. For the beginning real estate investor, the choice is usually between becoming a near-slumlord or fixing up cheap properties for resale.

I recommend residential fixup for quick return on investment and less hassle from landlording for the beginner.

I bought $10 million dollars in rental properties during my first four years in the business, and it made me a multi-millionaire. I followed the instruction of the books and seminars precisely. It made me rich. But it was a costly mistake. In fact, in my opinion, becoming a landlord in the beginning of my real estate investing career was what I consider my "$10 Million Mistake."

Perhaps an explanation of what I term a serious "mistake" can guide your decision in starting a real estate investing career.

Problem 1. I can clean out toilets pretty well. I've cleaned out quite a few. It's not the most fun activity I've ever had. I never thought of it as a party. But I can clean toilets in the maintenance of rental property as well as anyone.

Cleaning toilets is simply symbolic of all the upkeep jobs necessary for being a landlord. But let me assure you, there are many, many other detestable jobs required in landlording, too.

I can clean out one toilet. But cleaning out toilets in $10 million dollars worth of properties is a little beyond me. So, that's why I had to quickly start an in-house maintenance company.

Problem 2. I can rent one apartment to an applicant. But renting $10 million dollars worth of properties is beyond me. So that's why I had to start an in-house management company.

Here's the point. Any person who becomes a landlord can handle a few properties. But a few rental properties seldom make you rich. I "became rich" as a landlord by acquiring a lot of properties which required a lot of renting and a lot of maintenance work.

Eventually, my landlording life became helter-skelter.

I never want to be a landlord again in this same capacity. It is a deterrent to real estate investing success.

Real estate investing has many better opportunities other than landlording.

The easiest and most quickly initiated opportunity is the fixup of cheap housing. With efficiency, the beginning real estate investor can acquire a cheap house with little or no money down, repair it with "sweat equity," and dispose of it through a sale within 30 days for $5000 to $10,000 profit minimally. Several of these cheap houses can quickly replace a job income and can lead to full-time real estate investing.