Real Estate Investing Basics

3 Major Sacrifices Real Estate Investors Must Be Willing to Make

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
233 Articles Written
mortgage-approval

Real estate investing is never easy — and anyone who says otherwise is not telling you the full truth. There is a huge variety of methods to invest when it comes to real estate; however, the one thing that they have in common is that they all require a lot of sacrifices. If you want to make it big, then be sure that you take note of these following demands that real estate investing will be making.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

You Must Reinvest Your Earnings

In order to become a successful real estate investor, the first thing that you will ever need to do is to ensure that you learn how to reinvest your earnings. After all, one does not simply build up their capital by spending everything that they earn.

Related: Sacrifice: A Real Estate Investor’s Magic Bullet

Regardless of whether that means hiring another employee to scale operations or utilizing the capital to aid in marketing for properties, by reinvesting your profit back into the business, this will help your empire keep on growing! Additionally, hiring the right people with reinvested earnings will allow you to free up your time working in the business and working towards managing the business instead of working on details. 

raise-funds-deal

You Must Spend Time, Money & Effort

The ride on the real estate investing train is not a free one. You need to either commit your time, money, effort or even better, a combination of all. However, the biggest issue is how to begin. While the majority of people don’t have the money nor the fortitude to become a serious real estate investor, it is definitely true that money does make this journey a lot easier to navigate, and investing your time will help to preserve the capital. In addition, if you put in the effort, you will find yourself having an increase in knowledge that will essentially help you to tackle the next deal. 

Related: Not Easy, But Worth it: The Top 7 Sacrifices Real Estate Investing Demands

You Must Be Willing to Work On Your Craft Indefinitely

Similar to any profession, you have to treat real estate investing like a craft. Be sure that you constantly work on it and continue to educate yourself. The market is forever changing, and the tricks and techniques used are always evolving to include newer and improved things. So, if you want to be able to keep up to date with everything and never fall behind on the road to long-running success, it is crucial you actively stay involved. In theory, it takes 10,000 hours to master a certain skill. This holds true to accumulating the necessary skills to achieve high levels of success as an investor. 

cap-rates-calculate

Investors: What other sacrifices do you believe real estate investing requires?

Let me know with a comment!

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.
    Curt Smith Rental Property Investor from Clarkston, GA
    Replied almost 5 years ago
    All great and true points! I teach a few things at my local REIA and I say “you’ll have to give up TV, going out to the sports bar …”. It’s tough love. Both my wife and I have post bachlors degrees that have been little help re our financial freedom goal. We totally agree that REI education for education’s sake is the starting point. through over education you meet really smart folks that you keep in your network. Slowly over a few years you are thinking at the “eagles” level an not the frog’s ground level. I just love the “just do it” video by Art Williams on youtube. Says it all. Art’s delivery technique and message gives me goose bumps. To too many it’s tedious. I’m ok with 90% of most folks not liking the message: stop watching TV, spend that time talking to sellers and writing yellow letters. That leaves MORE room for me to “dominate”. I feel a useful service at BP would be to put up a poll where members fill out questionnaires, how many deals per year, total holdings, time per week spent in education, time per week talking to sellers etc etc. It would be useful for new folks to see how much time the accomplished still spend in education, their education budget and time spent talking to sellers and working on deals. My bet is that the hours spent correlate with # of rentals, deals per year.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    I will have to check the video out by Art Williams sounds interesting. I totally agree with having the questionnaire to help newbies getting into the industry. Great suggestion Curt!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied almost 5 years ago
    Reinvesting your earnings is another way of saying you must defer gratification, which is absolutely true. It’s true for everyone, but it’s even more true for real estate investors.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    Totally agree Andrew. Reinvest to feed the business machine
    John Bennett from Lincolnton, North Carolina
    Replied almost 5 years ago
    Thanks Brandon, that was good stuff!
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    Glad you enjoyed the article John. The name is Sterling, but some people say Brandon & I look alike so I understand your confusion
    Michael Williams Investor from Tampa, Florida
    Replied almost 5 years ago
    Delay gratification, OR derive gratification from seeing your investments grow. That is how I resisted buying my dream car for about 20 years. I started very young and it took me that long to get comfortable enough to splurge. This is a get rich very slowly business. Never stop learning. Put one foot in front of the other. I’d like to add that in the time I’ve been paying attention I’ve seen 4 cycles. Learn the signs. When you hear “multiple offers” that means it’s seller stage 2 and the smart investors time to exit (sell). That is where we are now. But this time could be different, you never now.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    Dropping some knowledge Michael. Thank you so much for the input! What was the dream car you waited 20 years for?
    Zachary Sargent from Bloomington, Illinois
    Replied almost 5 years ago
    As an investor about to embark on this journey I just want to say that I really enjoyed reading this. I’m building up my funds, have other investors/mentor to work with and I’m going to take my time time to learn the ins and outs. This community provides countless amounts of wisdom. Keep writing great articles and I’ll keep reading them!
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    Thank you for the kind words Zachary. I wish you the best of luck in your venture. Now go and be great!
    Jerry W. Investor from Thermopolis, Wyoming
    Replied almost 5 years ago
    Sterling, I think this is your best article yet. It isn’t magic, its hard work and committing your time and money and energy into real estate that makes it work. I don’t know when the last time was I watched TV.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    What is this tv thing you speak of? Thank you for the kind words Jerry. Glad you enjoyed the read. Since you aren’t a tv watcher I’m assuming you read books. If so what’s your favorite book you have read? Can be on any topic
    Allen Sproul Investor from Orem, Utah
    Replied almost 5 years ago
    I appreciate this article and the comments. Completely agree with you, @AndrewSyrios, about delaying gratification. My wife and I have been in deep discussion for several months now, seeking to find our path through REI and manage our household debt. In these discussions, it is clear that your partner, be it business or family, needs to be on-board as well. You are a team. You need to communicate and make sure everyone’s needs are concerns are addressed. Create a communication plan together. Lay some ground rules on how you will communicate and when. This creates trust and focus. When you both know what the other is expecting, it makes for a much happier relationship. =)
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied almost 5 years ago
    Glad you found value in the content Allen. Speaking from experience. Glad you & your wife are on the same page. It will only make the relationship stronger. Have you purchased your first property, Allen?
    Nancy
    Replied almost 5 years ago
    Hello Sterling, Good article you outlined the importance of the three big issues investors must address – time, money, and knowledge. Through time one’s real estate knowledge will increase and with more RE hopefully, passive income will also increase. I also think obtaining a mentoring and being able to be open minded to others advice is necessary as a method to remove possible failure.
    Kris Haskins Investor from hampton, va
    Replied almost 5 years ago
    Good content Sterling, It hurt to read the word “indefinitely” but it’s sobering to agree with you. Our industry is changing so much as we have to adapt. Great article.
    Kevin Fox
    Replied over 4 years ago
    I think anyone whose found success in this industry will tell you time and time again that these sacrifices can be well worth it if you work both hard and smart. Good tips!