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# Investing should be a second skin
- URL: https://www.smdp.com/investing-should-be-a-second-skin/
- Published: 2008-06-04T15:00:00.000Z
- Updated: 2026-10-25T00:10:45.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Mike Heayn Real Estate 101*

I WAS WORKING OUT THE OTHER DAY and tore the skin off the inside of my hands doing pull-ups because I was grabbing the bar too tightly. When I finished the workout and looked at my shredded hands, it became very clear that there is a right way and a wrong way to do something. If I had not held the bar so tightly I would have saved my skin. The workout got me thinking about risks and the wrong way to invest in real estate.

I remember walking into broker forums and listening to investors talk about the single family homes they purchased and how they were only losing a couple thousand dollars a month, but would make it up in appreciation in a few months. Actually, at the height of the real estate market, those investors — or speculators in my opinion — did make up the money they lost. However, I would not call negative cash flow an investment.

A couple weeks ago, I stated that when purchasing a piece of investment property, you are purchasing an income stream. With few exceptions, one being a complete rehab of an investment property, it would not make sense to purchase a property and hope to make the money back on appreciation. When purchasing an investment property, figure out what return on investment you want. If the property meets your criteria, pursue it, if it does not walk away. As one of my clients always says, “The best deal is the one you can walk away from.”

Before you get into a real estate investment, figure out how you are going to get out of it. Do you plan to hold the property for five, 10, 15 years? Do you want to rehab the property, bring the rents up and sell it after a short hold period of two to three years? Know how you are going to get out of a real estate investment before you get in. The next few years will be challenging for investors in Southern California, but that does not mean a real estate investment cannot be profitable.

One problem some investors face is trying something new with little to no knowledge. First, let me say that I am not suggesting that a real estate investor stay in one realm of real estate investing, whether it is commercial, residential, industrial, etc. What I am saying is if a real estate investor is going to try some new type of investing that investor needs to get the proper information. All too often, I have seen real estate investors move from purchasing a type of real estate they know into a type of real estate they do not know.

If you want to invest in a new type of real estate, find someone who is successful and talk to them about how they got started. Listen to them and ask a lot of questions. Remember that you probably would not take medical advice from a plumber and you should not take real estate advice from someone who does not invest.

Remember when investing in real estate to make sure you do not rip the figurative skin off your hands by avoiding common pitfalls. For the most part, negative cash flow is not an investment and should be avoided when purchasing investment property. Before you get into an investment property, know how you are going to get out. Make sure you have a clear exit strategy and stick to it. If you want to try to invest in a new type of real estate learn everything you can and speak to someone who is successful. Avoiding common real estate investment pitfalls will help keep you on the track to real estate investing success.

MIKE HEAYN is a Washington Mutual multi-family loan consultant. He (310) 428-1342, or e-mailed at

*Originally published in the Santa Monica Daily Press print edition on June 4, 2008.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/060408.pdf?ref=smdp.com)