Real Estate Investing Basics

The Harsh Reality for Newbies Who Think Real Estate is a Way to Get Rich Quick

Expertise: Commercial Real Estate, Personal Finance, Real Estate Marketing, Business Management, Landlording & Rental Properties, Real Estate Investing Basics, Personal Development, Real Estate News & Commentary, Mortgages & Creative Financing
227 Articles Written
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People new to the world of real estate investing are often adorably naïve and optimistic about the realities surrounding it all. Their eyes are wide, and their thoughts whirl around the possibility of becoming the next Donald Trump. 

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However, the sad thing is that they don’t actually realize until they are deep into the mud exactly how much they are unaware of. So while the world of real estate investing can be very lucrative, sometimes there needs to be a little rain on a newbie’s parade in order to help them get grounded — and I don’t feel this way because I am a jerk (I’m actually a nice guy), but someone needs to give them a heads up before they fall in too deep.

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Related: Newbies: Considering Wholesaling to Break into Real Estate? STOP! And Read This.

Real Estate Investing Involves Both Time and Hard Effort

I bet you guys saw this one coming. Every good thing requires a lot of effort, and real estate investing is no different. So yes, in order to get successful in any kind of career path (not just real estate investing), you will need to put in a lot of work. There is absolutely no such thing as a get-rich-quick scheme. It’s about that daily grind.

Regardless of what you have been told about real estate investing being a means to passive income and cash flow without hard work, I am here to tell you that this is only true to a certain extent. This is because real estate investing is similar to a business, so if you want to earn money for the long term, you will need to learn how to keep the ball rolling, search for fresh income methods, create and solve new problems, understand new techniques and refine old systems.

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It is Difficult to Climb the Steep Learning Curve

Think about it. Steve Jobs probably had to take a long time to fully develop the very first Mac. With nothing similar ever having been created before, he (and his team) would have had to take a lot of time to slowly carve out their creation.

Related: 3 Common Misconceptions About Real Estate Investing Newbies Believe

So if I were to tell you that I wanted you to design some software from scratch, do you think you could do it? Well, unless you’re some tech whiz or a master programmer, I think not.

In order to build it, you will need to start gaining some knowledge and skills. From enhancing your mind by reading books to attending online courses and networking with others, you might be able to build a program in perhaps half a year if you work hard. So in all, becoming successful and making it in real estate investing won’t happen overnight and will definitely depend on how well you learn to climb that initial steep curve.

What would you add to this discussion?

Feedback is greatly appreciated!

Sterling is an multifamily investor specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded Sonder Investment Group, he owns just under 400 units. Sterling was featured on the BiggerPockets Podcast and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to wholesaling and scaling a business.

    Douglas Skipworth rental_property_investor from Memphis, TN
    Replied almost 4 years ago
    Good post, Sterling. It reminds of the 10,000 hours theory that has been floating around for the past few years that says it takes 10,000 hours of deliberate practice to become an expert. My suspicion is that holds true for excellence in real estate investing, too (unfortunately for newbies).
    Sterling White rental_property_investor from Indianapolis, IN
    Replied almost 4 years ago
    Yes the 10,000 is a great rule of thumb. I believe Malcolm Gladwell touched on it in his book “Outliers”. Even then when you achieve this “expert” level you still have to constantly work towards perfecting your craft. Thanks again for your comment Douglas.
    Priya
    Replied almost 4 years ago
    Hi Sterling, Great Post ! you have shared nice information here and I am also agree with you that, each good thing to come out require lots of hard work. Thanks!!
    Sterling White rental_property_investor from Indianapolis, IN
    Replied almost 4 years ago
    Thank you for the comment Priya. Were you able to start the new year off on the right foot in your RE career?
    Gaurav
    Replied almost 4 years ago
    Hi There, Great Job ! Really you have shared great thoughts here. I like it. Thanks !!
    Sterling White rental_property_investor from Indianapolis, IN
    Replied almost 4 years ago
    Thank you for the comment Gaurav and the kind words. I wish you the best of luck in 2016!
    DeVon Zumbrennen from Orem, Utah
    Replied almost 4 years ago
    Good Article and true! I have a neighbor who has gotten into rentals the last few years. They bought two 4-plexes using inheritance money for down payments. I asked him recently how things were going. He said, “Lousy. I thought we would buy these things and be rich.” I explained to him that each one was a small oil well producing just a little oil. You have to have patience to strike it big, but in the meantime each one gives just a small income. Adding them all together and they produce a decent income, but generally nothing like an “oil gusher.” Each one adds a little bit.
    Rici Ryan from Sandy, Utah
    Replied over 3 years ago
    I like the comparison to software designing. Good, common sense piece.