Why You Can and Should Invest in Real Estate
What do you think of when you hear someone mention real estate investing? There are a number of things that can come to your mind. But several of the most common are:
- sounds expensive!
- something that is way above my head!
- I could never do that!
- risky!
- that stuff doesn’t work!
What’s the truth about real estate investing? This is a get rich slow business model that requires patience, leverage, persistence, continuous education, and consistency. Most people know little to nothing about real estate investing. They have heard uncle Johnny complaining about that property he had 20 years ago that was a money pit. All that duplex did for him was cause him grief and pain. He almost lost his marriage over it. He always had to fix toilets. He never got a break and was always working on that old house. The tenant was a nightmare… and on and on. Uncle Johnny’s experience with real estate investing is not an uncommon one. It is unfortunate that this person’s uncle has scarred their concept of what real estate investing is and how it can be an amazing tool used to build wealth and financial freedom. It is no surprise that I use to think those same exact things. But eventually, I began to get serious and do my own homework on this fascinating industry.
I’ve come to learn several things about folks who speak negative about REI (real estate investing):
A. They have never owned any real estate, let alone an investment property to fix and flip or buy and hold.
B. They lost money on their first deal and “gave up” on the industry altogether.
C. They tried to do all of the renovations and maintenance themselves and quickly became burnt out!
But what would it feel like if you received a check every first day of the month in your bank account for $100? What about $250? How about $1,000? Would that be enough to spark your interest? It sure sparked mine!
Everything decision in life carries some degree of risk along with it. Real estate investing really isn’t as risky as you think. The risk can and must be managed properly. If you do your due diligence, know your numbers, and know your market extremely well, that reduces the risk tremendously. Blindly buying a property and just assuming that you will make money on it guaranteed is just throwing money at the wall and hoping some of it will stick. Guessing what a property will need and knowing what a property will need are two completely different paths. This can cost you all of your profits and then some! Pay attention to the details. Do your homework. Run all of the numbers that you need to have. A great book to read, study, and reference if you want to know more about REI is “The ABC’s of Real Estate Investing” by Ken McElroy. He does a phenomenal job of reinforcing how crucial it is to do your DUE DILIGENCE over and over. This book gave me an incredible new perspective and changed my life.
There is always a learning curve when it comes to learning anything new. But we have unlimited access to so many resources nowadays! It is extremely important to be getting your information from credible, reliable sources. Always do your research. Read as many books as you can on this subject. Listen to podcasts. Talk to people who are already doing it. Map out a game plan and then take action. Find a solid mentor who will guide you along the way. Being around other like-minded individuals is another very important concept. We are the people we spend the most time with. But the cool thing is that ANYONE can do it. It requires vision, commitment, dedication, and sacrifice. It is not easy. You may endure a few late nights occasionally. You can start at 18 or 78. The only stumbling block on this journey is you and your own thoughts.
Real estate investing doesn’t always have to be expensive. If you are serious about venturing into this industry, buy and read the book “The Book on Investing in Real Estate with No (and Low) Money Down” by Brandon Turner. It will open your eyes dramatically. He goes in depth on so many aspects of the business. But I will say that it is important to have some skin in the game (have a good amount of your own cash to invest with).
Partnering with other investors is the smart and efficient way to move up the ladder in this industry. What can you bring to the table? Maybe you possess knowledge of home construction, you have a knack for finding deals, you have your real estate license, or you possess project/ property management skills. Whatever it may be- ADD VALUE to the partnership! You may even walk away from a joint venture deal with not only a long-term business partner, but also that great mentor you were looking for!
This stuff, real estate investing, does work. When I collected a security deposit check along with another check for the first month of rent, everything that I had been reading about and hearing about from other investors became true in that moment. I saw the power of REI and the glimpse of financial freedom that it would begin to provide. Another life changing moment for me.
Even though you may have heard that real estate investing is expensive, requires too much insider knowledge, super risky, or doesn’t work at all, RETHINK REAL ESTATE INVESTING. It can and will change your life in ways you have never imagined. I would be more than happy to answer any questions or concerns you have about REI. You can do it!
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