Personal Development

The 3 Major Reasons I Invest in Real Estate (Other Than Money)

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Personal Development, Business Management
32 Articles Written
finding-purpose

I am going to guess that over 50 percent of the posts on BiggerPockets are all about the "how." Everyone wants to know how to invest in real estate. Whether it is wholesaling, fix and flip, or buy and hold, most people come to BiggerPockets looking for an answer to the "how" question.

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But the question most investors skip or gloss over is the “why?”

  • Why are you in the business? 
  • Why are you doing what you are doing?
  • Why did you set out on this path? 

My partners and I were just revisiting this question recently. We’ve expanded our business into a different segment, and it requires us to re-ask this question. We need to be on the same page for the “why.” It is our guiding light in business. Everything stems from knowing that answer. I wanted to share some of our answers and hear some of your “whys.”

Working for More Than Money

I want to start with the easy answer. Most people never get past this answer: I am in it to make money. Great, get a job. Oh, that’s not what you mean. You meant you wanted to make “passive income.” Why not buy a McDonalds? Too expensive? Don’t want to be in fast food? What about a laundromat? Don’t want to count quarters? What about a hair salon? I can go on and on with plenty of businesses that make money and have fairly low barriers to entry. The point is, if you dig deeper into your “why,” it will reduce the “hows.”

Related: Developing Your “Why”: How to Work for MORE Than Just Money

We are in business for 3 reasons other than making money.

  • To provide high quality affordable housing in safe neighborhoods.
  • To revitalize the incredible housing stock in Chicago, which in turn improves the communities they are in.
  • To help others make money doing what we do.

Side note: There is no city in the US that has the housing stock that Chicago has. Chicago has an assortment of brick and stone single family and multifamily homes. No one is building homes like this anymore.

Our Investing Goals

Our first goal is to provide high quality affordable housing. Chicago, much like other major metropolitan areas, has high rents in the affluent neighborhoods. Even in the not-so-affluent neighborhoods, rents can be high. We strive to put a product out where people will be happy to call it their home and treat it as such. Most importantly, we seek to provide a place that people can afford. That is one reason why we accept Section 8 tenants.

Our second goal is to revitalize Chicago housing stock, which improves communities. My partner and I were just in a meeting this past week with an alderman trying to put together a plan to revitalize her ward. The first thing we talked about was housing. Without housing, there isn’t a community. There are still properties that sit vacant to this day and have not been touched. These properties are a drag on the community and need to be taken care of and put back into livable shape. We do that.

Our last goal is to help others make money doing what we do. This goal’s origins are different than where we are now. The goal started as, “We need money. Who will give it to us?” After we got past that initial phase, we now look at it as helping others make money. For our private lenders, we offer an alternative to investing in stocks and bonds. The other day, I received a call from an investor who told me that we are his best performing asset this year. For the investors that we sell property to, we offer an opportunity to own real estate without all the hassles of owning real estate and make money too.

Related: Why the Small, Seemingly Insignificant Actions You Perform Daily Are VITAL to Your Success

Conclusion

We never started with these “whys” in place. We started just like the most others. We wanted to make money. Because we weren’t clear, we diluted our energies by running after a bunch of things that ended up distracting us. We got involved in partnerships that wanted something other than what we wanted because we saw it as an opportunity to make money.

We wasted energy on chasing after some commercial/industrial deals that were outside of our expertise. We spent thousands of dollars on mailing and infrastructure for wholesaling. In the end, answering this question set the direction of our business. When opportunity comes up, we check our “why” and see if it fits before making a decision. If it fits, it is full steam ahead. If not, there are plenty of others that are looking for that deal!

What is YOUR “why”?

Leave your answers below!

Mark Ainley is an investor, managing broker, and property manager with almost two decades of experience in real estate. Mark found his way into real estate by purchasing and flipping condominiums p...
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    Lisa DuFaux Investor from New Port Richey, Florida
    Replied over 5 years ago
    Good post. My why is almost identical to yours. While my motivation was to be financially free of an employer, the “why real estate” question has to do with improving homes and neighborhoods. There is nothing more satisfying to me than taking a nasty house that people don’t even want to walk into and turning it into a place that gets “wows.” It’s extra fun when the neighbors come over to thank you!
    Mark Ainley Property Manager from Roselle, IL (Chicago Suburb)
    Replied over 5 years ago
    Lisa, I love when the neighbors walk over and thank us! Thanks for the reply!
    Don Alberts from Frankfort, Illinois
    Replied over 5 years ago
    Mark I appreciate your service. Your reasons are my reasons, and I believe our success is a result of this. Please continue to give and I wish you all the rewards. Don
    Mark Ainley Property Manager from Roselle, IL (Chicago Suburb)
    Replied over 5 years ago
    Thanks Don!!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 5 years ago
    Jim Collins made the great point that profits is like air, water and food to a company. Yes, you need them, but they are not the thing someone lives for. It’s key to have a more expansive mission
    Michael S. Helton Real Estate Redeveloper from Reno, NV
    Replied over 5 years ago
    I have generally defined my WHY, but your post prompted me to put it down in writing. Thank you.
    Mark Ainley Property Manager from Roselle, IL (Chicago Suburb)
    Replied over 5 years ago
    Thanks for the reply! Putting it in writing for us makes a huge difference on our success and how fast we achieve it. Putting it in writing also helps us avoid distraction of all sorts!
    Nancy Londono
    Replied over 5 years ago
    Thank you this article I really enjoyed it.
    Erika Carter Residential Real Estate Broker from Chicago, IL
    Replied over 5 years ago
    Great post Mark! I’m trying to change Chicago one home at a time!
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied over 5 years ago
    Great post! Your why is aligned with my why. My last why is: to achieve financial independence as a result of providing safe, affordable, and high quality housing. I’ve written my whys down and look at it every morning to have it drilled in my head and as a reminder in case someone asks me.
    Joshua Jasien Investor from La Grange Park, Illinois
    Replied over 5 years ago
    Great point on the focus being quality, safety, affordability – and doing it through revitalization which brings marginal areas back to life.
    Luka Milicevic Rental Property Investor from Nashville, TN
    Replied over 5 years ago
    Mark I am very happy you posted this article. I think too often we get caught up in the money aspect and perhaps forget about the service and purpose we need to provide to our communities. I think providing a good place to live for good families and revitalizing houses/neighborhoods is extremely important. I believe that should be the number one goal and money/profit is a by-product of the service you give.
    Katie E Bommarito Real Estate Agent from Chicago, Illinois
    Replied about 5 years ago
    Hi Mark, Thanks for a great post. My husband and I recently purchased our first investment property in Chicago, a two-unit brick building that we owner-occupy and rent out the other unit. We really enjoyed rehabbing the building, which was built in 1885, to today’s specifications while keeping so much of the original character. Our building was previously an eyesore on the block and hearing so many compliments on the rehab from the neighbors made it that much more rewarding!