10 Shocking Truths About Real Estate Investing

by | BiggerPockets.com

Stop the hype already.


We don’t need any more big promises, big cars, or big hair – and we really don’t need any more infomercials…

We need action.

We need actionable steps to get moving.

I understand the importance for motivation. I love motivation. I need motivation. What I don’t need is hype. To briefly explain the difference:

  • Hype: Exaggerated expectations of an outcome based on … um…. one or two special cases.
  • Motivation: Realistic possibilities for an outcome based on past performance of many others.

The reason I like motivation is because it tells me what is likely possible if I follow a certain plan. Hype tells me what was possible for some guy in Timbuktu if I get as lucky as he did.

Motivation tells me I can do this. Hype tells me I “will” do this, easily.

Telling the (Sometimes Shocking) Truth

The purpose of this post is to sort out the differences for you and share ten truths about real estate investing. I call it “shocking truths” because for those coming from the world of hype, these truths are shocking! For those of you have been investing for years, perhaps these truths are as evident to you as gravity. However, if you are coming to BiggerPockets after researching some of the hype you’ve heard about with real estate, maybe these points will be tough pills to swallow. At BiggerPockets – we are all about stopping the hype, leading with truth, and educating through our peers. So without further ado, here are ten shocking tips about real estate investing.

1.) Real Estate Investing is Not Always Easy

Whoa! Right out the gate, I hit you with one of the meanest things I could say. Perhaps you were expecting something softer to start, but if you don’t understand this point at the start – none of the other truths are going to matter. Go ahead, say it with me…

Real estate investing is hard work.

It takes skill, determination, perseverance, and sometimes even a whole lot of sweat and tears.

You don’t hear this very often in the “hype” – but the fact is, every investor who has ever built lasting wealth through real estate has done so by hard work. If you aren’t willing to put the time or the work in – look elsewhere to fulfill your investing plans.

That said, there are varying levels of “hard work,” depending on your strategy or need for profit. If you are just starting out and have no money, experience, or contacts but are looking to replace your full time income: it’s going to be extremely hard work. It’s going to take a lot of reading, a lot of networking, a lot of late nights and early mornings. It’s going to take passion. Do you have that passion?

However, if you are just looking to get a solid 7-12% return on your cash investment and don’t need to suddenly make money out of thin air, the work is much easier – though it still can be hard work when things go wrong. Private lending, notes, REITS and other investments still have their due diligence required.

2.) Real Estate Investing Isn’t Free

Real estate investing is not free. Though the hype loves to talk about “no money down” investing, the fact is – it does take something to invest in real estate. Whether it’s money, time, knowledge, or experience – you are going to need to bring something to the table. The more you can bring, the easier it is going to be.

For example, if you can bring a lot of knowledge and time but no experience or cash – it can be done but it will be tough. If you can add “experience” to that, it becomes increasingly easier. If you can bring all four – it’s the easiest. So work to build up all four areas of your real estate arsenal.

If you are lacking at all four – at least start building your knowledge here on BiggerPockets. I’d recommend reading through The Ultimate Beginner’s Guide to Real Estate Investing.

3.) Real Estate Investing is For Math Nerds

I was a co-captain of my high school Math League. Each week, we would take tests for fun, competing with other schools to see who could get the best score an math tests.

I was am a nerd.

You don’t need to be that big of a nerd. It doesn’t take calculus math to figure out cash-flow or return-on-investment. However – it does take math. It does take the dedication to sit down and really learn how the numbers work in relation to one another. It takes the dedication to learn the vocabulary.

In high school, I wasn’t a math nerd because I had a good mind for math. I actually think I had a pretty terrible mind for math and figures. It didn’t always come naturally to me. However, I had something more important: dedication. I would sit at my kitchen table and work on my math homework because I knew I needed to understand the concepts being explained. I would stay after school for extra help understanding my homework. I did everything in my power to learn the math.

You don’t have to be good at math. You have to be dedicated to learning the math though. As I said earlier – it doesn’t take calculus level math. For a great book on getting started with real estate investing math, get a copy right now of Frank Gallinelli’s What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures. (That’s an affiliate link there… so if you buy through that link- you’ll be helping support BiggerPockets!)

4.) It’s also a People’s Game

While real estate investing needs to bring out the inner-nerd in all of us, it also needs to bring out the inner-prom king or queen in all of us as well. Investors need to be social.

Whether you are dealing with an emotionally devastated motivated seller or a high-strung real estate agent – this game is a people game. The better you can handle people, the better you’ll be as an investor.

If you are just beginning, this is even more true. You need to network. You need to meet people who can help you, and you aren’t going to get there by sitting on your computer in the corner of your dark room (well, maybe if you are using the BiggerPockets Forums to network, that might be possible!) Right now – the best thing you can do to get started is to build connections.

Don’t be afraid of getting out there and shaking hands, telling people what you do (and what you want to do) and meeting people who can change your destiny. It’s not going to happen by itself – you need to take action. Start building relationships today for the future you want to create tomorrow. (Tweet This Quote!)

5.) Real Estate Investing is Slow and Boring

Did he really say that!?

Yes. Building wealth through real estate investing is slow and boring – and that’s a problem for a lot of investors. Yes, flipping and wholesaling can be a lot of fun but I’m talking about true passive wealth building. Building serious wealth is not complicated and does take time – so a lot of investors get bored and start trying to do different things to get more excitement (and money) today. Greed enters the picture and before you know it, investors are paying $400,000 for a $100,000 property that cash flows negative $3000 per month. Like that, it’s 2006 all over again!

Be patient.

Investing for stability takes time and can seem boring at times. It’s not going to make you millions of dollars overnight, but it can build up over time to make you a lot of money for later in your life. But for a step by step – and boring – plan for building wealth, check out my article “How to Make a Million Dollars in Real Estate.

6.) It Doesn’t Need to Be a Job

Soooo many individuals come to BiggerPockets everyday and declare that they want to be an investor and quit their job. However – what most people fail to understand is that investing doesn’t have to be a full time job. As I mentioned in the previous section – there are ways to invest in real estate for fun and profit – like flipping and wholesaling. However, these are day-jobs like any other that require trading time for dollars. While there is absolutely nothing wrong with the notion of trading time for dollars – it is not the only way.

Find a job you love.

If your passion is in helping people – be a nurse or a teacher. If your passion is software – then go work for Apple. If your passion is property – then go flip houses. But you don’t need to be a full time real estate investor in order to build wealth through real estate. As I mentioned above, real estate investing for building wealth is a slow and boring process but it is not complicated (though, again, not necessarily easy. There is a difference.) Find a job you love, and begin building wealth through real estate investing. It’s the best of both worlds and you’ll find the most happiness doing the thing you love.

What excites you and would make you excited to get out of bed and get to work? Find that and follow it.

7.) You May Lose Money

Correction: you will lose money.

The fact is – most real estate investors lose money. It’s not something we plan for, but it’s something that happens. Real estate investing is a never-ending learning process and often comes with a hefty tuition bill (Tweet this Quote!)

We try to create systems that prevent against loss, but sometimes it is inevitable. It doesn’t even mean you will lose money on a total investment – but you will lose money in the day to day details. Sometimes you’ll make bad choices and sometimes other’s will make bad choices that affect you. Perhaps a contractor will rip you off and skip town. Perhaps a new Section-8 rule will make your income drop by 20%. Perhaps you’ll buy in the wrong time of the market and your values will plummet. Maybe a storm will hit and destroy your roof. Whatever the cause – you will lose money.

I believe there are certain principles and safeguards you can set up to prevent against loss (like only buying property with great cash-flow and always have multiple exit strategies), but in reality – it’s impossible to stop all loss. Prepare for it, save for it now, and expect it soon.

8.) Strategies Will Change with The Market

One of the things that intrigues me most about real estate is the ever-fluid movement of it. It never stays completely the same, and it’s fun to see what it’s doing and where it’s going. Sometimes (as mentioned above) this can cause a loss for us – and other times it can cause a gain. What you are doing today may not work tomorrow.

That said, I am not a big believer in trying to chase the latest market trend. Just because it’s hot in Memphis right now doesn’t mean I’m going to move there and start investing (though I have no problem with those who do. I hear it’s great! I’m just not a Turnkey guy… yet!) I believe in following certain rules (like needing great cash-flow) in any market and if your market is drying up, change strategies but follow the same rules.

I’m not going to get sucked into flipping a property with the assurance of negative cash flow if it doesn’t sell – hoping the current rise in prices continues. I might flip a property, however, knowing that I could rent it out as an exit strategy and be okay. So the strategy may change, my rules will not.

9.) Most Starters will Quit

There is a good chance you are going to quit.

It’s just a fact. Most people who try to get into real estate investing quit before ever getting their first deal.

It’s a lot like dieting. It clearly works, and there have been countless examples of those it has worked on, yet the majority of people who start a diet end up quitting. Why?

I think it comes back to my shocking truth number one: it’s not always easy.

The point of this article was to share these truths with you so you have the greatest chance for success. I don’t want you to quit. I want you to succeed! I want you to make a lot of friends, make a lot of money, and come to BiggerPockets to share your stories and your wisdom. However, it’s not going to happen if you quit.

Don’t quit.

10.) Real Estate Investing Can Be Incredibly Fulfilling

This is my favorite truth of all.

Real estate investing is fun at times, it’s freeing, it’s exhausting, it can be boring – but it’s also incredibly fulfilling. I am passionate about what I do because I love what real estate investing has done for me. It’s not just a job, it’s not just a way to build wealth. It’s a complete lifestyle change. It’s about leadership and taking control of my financial future. It’s about making new friends, helping people out, and improving my community.

If you are looking for a way to build wealth – I’m here to help and BiggerPockets is here to help. I want you to experience all the joys and fulfillment that a life in real estate can bring! Definitely jump head first into this community and experience all the awesome things it can do for you.

Don’t know where to start? Check out my article “The ONLY Step You Need to Get Moving in Your Real Estate Investing” and let me know below in the comments: what is your favorite truth?

About Author

Brandon Turner

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.


  1. Brandon, thanks for the (several breaths) of fresh air … and the bucket of cold water.

    Bigger Pockets is definitely filled with lots of people who are willing the share information, offer advice and maybe partner with others. Learn from other people’s mistakes (and avoid them) and other people’s triumphs and try to reproduce them.

    Just as in any learning/investing situation, check more than one source.

  2. Mehran Kamari on

    This is such a great article, Thanks Brandon. It’s successful investors like you, who take the time to share your insight, that make it possible for someone like me to hit the ground running.

    I will definitely do the same for others as I get the chance to help out!

  3. Brandon,
    LOVE it!!!! You are singing my song! Everytime I see one of these “get rich quick” informercials I literally feel my stomach churn and I have to reach for the smelling salts. So many new investors get reeled in by the HYPE and then never make it because they never had a realistic idea of what investing really is.

    Thanks for posting!!

    • Brandon Turner

      Thanks so much, Katherine 🙂 It’s always pretty apparent when I speak with a wannabe investor (forums or just in real life) when they are buying into the Hype vs. motivation. I feel bad for em, cause I know they have a big reality check coming!

  4. Steve Babiak on

    Investing is about numbers, so BASIC math skills are definitely essential. I’ve lost track of how many forum posts I have seen where the arithmetic is incorrect – and that the poster could have used a calculator to get the correct answer. So simple yet so hard for some I guess.

  5. Thank you Brandon. I’ve been reading BP extensively for the last several weeks and this is my first post. 🙂 While hype isn’t what got me into RE investing, it’s still helpful to have expectations level-set in such a matter-of-fact way.

    Because I’ve approached RE investing with eyes wide open (and because BP is such a fantastic and informative resource!) only one of your 10 points came as a surprise. That was #8: “Strategies Will Change with The Market”. This is good to keep in mind long term.

    My favorite, however, was #9: “Most Starters Will Quit”. Though I’d figured that one out already, seeing it in black and white just galvanized my already firm resolve to weather the rocky times, move through the learning curve and learn from the mistakes that inevitably accompany inexperience. I’m excited by the challenge and look forward to eventual success. Thank you for strengthening my resolve!

    I would be remiss in my first post if I did not say “thank you” to the BP founder and everyone who has contributed content to BP. This is an incredibly amazing site and I truly could not have asked for a better resource. The breadth and depth of information here is incredible, not to mention the other opportunities available like networking which I haven’t even begun to leverage yet. Thank you for such a wonderful place to learn and grow. 🙂

    • Brandon Turner

      Thanks so much for the awesome comment, David! Definitely keep an eye on this blog- there is so much great content that comes up here all the time, it’s crazy! And yes, I agree – Josh Dorkin deserves a big thanks for all the work he’s put into this site over the years! Keep in touch!

  6. Great Article, Mathlete..I mean Brandon! 🙂 Seriously, it is a really good article and I agree with each point. My post is going to be about building the right relationships so your #4 is a perfect prelude to my article. It is great that you lay out true expectations on all fronts. It is certainly not easy, but is is definitely worth it if you stick it out. This article will help people have better expectations and therefore more success .

  7. Brandon –

    This is one of my all time favorite posts. So many people try to “glamorize” real estate investing when in reality it is a whole lot of hard work. You have to really love it to stick it out especially during those tough times that inevitably come.

    Everyone of your points should be studied and absorbed by anyone thinking about making a career of real estate investing. This business allows those of us that love it, live it and breathe it to create a life that we love.


  8. Jerry Robins on

    Thanks Brandon!

    I really appreciate hearing the truth and it’s especially important to me as a ‘newbie’ to real estate investing (in Chicagoland). I’ve spent quite a bit of time listening and reading about the next great thing in rei and too often, it’s filled with hype. I really had to dig to find the truth, in many cases, so appreciate articles and books like yours that are realistic.

    Thanks for the advice – I’m going to continue to spend time reading BP articles and engaging when I can so I continue to learn. I had a deal fall through in late March that I had started in late January, so I know it doesn’t always work out. I’m writing a contract, today, so we’ll see how that goes. This would be my first real rental property (I’m in it for the cash flow).

    Thanks again.

  9. Great post, Brandon. I can certainly relate to #2. I’ve spent close to $3,000 getting my business up and running. That includes things like website hosting, business cards, tuition costs, letters, envelopes and the biggest money trap – STAMPS!!

    I think it was Brian Burke who said you are going to have to pay for your real estate education no matter what – whether that’s through going to school or doing your first deal, but you’ll end up paying for your education one way or another.

  10. Loved this article to death, Brandon. Every word of it true. 🙂

    I’d just add that, while it’s not advisable to chase short term market trends, it does pay to keep your eyes open to what’s happening to your “favourite” markets, and regularly compare it to long term trends in other markets – be they out of town, state, country or continent. It’s a big, virtual global world out there – if we don’t take advantage of the technological advances that enable us to capitalize on it, we’re losing half the story – at least, in my opinion.

    To take us as an example, we now have US, Canada, Australia, New-Zealand, Singapore, Israel and Hong-Kong based clients – and hope to expand further still – all of whom are purchasing tenanted properties in Japan – a country that most of them have never been to – because they were drawn to the returns, to the regulated environment, to the lure of “the Asian century”, or even to the mere “exoticism” of it all – and haven’t looked back.

    My point is – this is the 21st century. One can (and should, in my opinion) take advantage of the fact. The world’s becoming a very small place inded. 😉

  11. Charnee Walker on

    Talk about a wake up call, and you caught me while my adrenaline was running high. My favorite fact was that “Most Starters Will Quit”.
    I love starting something new, and getting into this realm of business has opened my eyes to so much so fast. I have a friend that is very successful in the real estate world and from doing the research on my own I have come to the conclusion on making it a way for me. As you also stated, it doesn’t have to be a full time job but it can assist me in paying for school. Having big dreams can get you in the clouds so fast, and the hype can sound better than the motivation. Yet, having these truths brought me back down to earth and with a different heart to attain success.
    Thank you for the motivation. I too strive to be that kind of motivator, to give others the motive to succeed with no excuse to fail. You may fall, but don’t fail.

  12. Brad A. Nielander on

    I Am about to go into my first real estate venture in a few months, and my story is very similar to yours. I will leave comments and let you know how it is going.

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