This might warrant some raised eyebrows but I always asked myself the same question: If real estate is a great way to become wealthy, why isn't everyone doing it? Now I'm not saying investing in real estate is easy, because I know that it's not easy. I know that it requires a lot of hustle and grinding. However, I know a lot of people who work 3-4 jobs and easily work 60 hours a week. They obviously are determined to make money, and whether they are living paycheck to paycheck or not, why don't these people working so many shifts save up money to buy a house and slowly progress their way towards passive income? Is it because of fear of going further in debt? Is it because they don't know real estate investing exist? I always ask this question on Google but there's not an answer that answers it.

"The average person does not understand. Dream, and he thinks you're crazy. Succeed, and he thinks you're lucky. Acquire wealth, and he thinks you're greedy. Pay no attention. He simply doesn't understand." My parents were buying new cars in the 60's and 70's. Mustangs, Vic's, Crosly's. The cars new equalled about half a year's salary. They don't remember how much they later sold the cars for or where they are now. They also bought houses in '69, '74 and '81. Each time they sold, the house price doubled. They remembered that fondly. Me- "So, you bought new cars on payments that essentially dropped to zero. You bought 3 houses that doubled in value. Did it cross your mind ever to buy more houses?" Parents, with a look like I'm from Mars- "More than one house? We couldn't afford that." Pay no attention. The masses of sheeple simply do not understand. And that's a good thing for us!

@Ryan Dao, Here's something you won't find on google.. it's hard work, it's very expensive $$$$$, it's stressful, it's time consuming and the amount of BS you have to deal with is ridiculous! Some of the crap I see and do, there's no way the average person can or would do it! I encourage everyone to get in, but the reality is, it takes a lot more sacrifice and risk than traditional investments. Don't worry about others, just focus on yourself, as you're your biggest competition!

@Ryan Dao this is actually happening at a deeper level in our psychological programming. From the time we are little, we go to school and are taught to follow the rules, get good grades, go to college and you will get a good job. Nobody (accept me and a few others) tells their small child to grow up and start a business. How many kids dress up like a landlord on career day? We are told starting a business is risky. Fifty percent fail within the first five years! This comes from the SBA, an organization that is there to promote small businesses! We are told by "financial planners" to invest in the stock market. They say if you do invest in real estate, buy a fund that holds real estate. The people giving advice are nothing more than sales people, who have limited net worth themselves. They are trained to sell what gets them the highest commission. The media and public perception of landlords is that they are greedy, mean and uncaring. Who would want that job? We are taught to believe wealthy people are greedy through their portrayal in the media. Even when someone wealthy donates money, they still get attacked. People say they got wealthy on the backs of others. We play this message in our subconscious and it holds us back from attaining wealth. The truth is that the most wealthy people in the world provide the majority of charitable giving. Wealthy people pay the majority of taxes. That is not what you hear. The media says real estate is risky. Who needs more evidence than the last crash? People lost everything, why would anyone want to get into that business? The biggest problem is most people have the employee mentality. They want to leave all the big decisions to someone else. They want to go to sleep at night thinking everything is ok. When you own rental property, you need to be prepared to make big decisions, manage risk and prevail. I cannot count the number of people I have seen exit this business because they just don't have the stomach to handle it. In this business sh#t happens and some really bad sh#t at times. Some of it is in your control and some is just part of the business. I don't think information or education is the problem. In fact there has never been an easier time in history to get a free education on anything. It is peoples own limiting beliefs that hold them back.

The reason for this question is complex and the answer is equally complex. First, as entreprenuers, we are weird. It is not normal to work for yourself. It is not normal to spend the money that we do on practical (rather than fomal) education. It is not normal to focus on peronal growth and development. Second, we are in "sales." Sales and marketing scares alot of people. it creats images of the slick talking salesman or the crafty marketing specialist that gets people to do thing that are not in their best interest. Third, they listen to alot of naysayers and always ask what if it goes wrong Fourth, they are resistant to change. Getting into this business is a big change for anyone. Fifth, they are unwilling to learn. To get good at something, you must first suck at it. People dont like doing things that they suck at. Sixth, We need to realize that not everyone thinks like we do. One of the most common assumptions that we have is that other think like we do. That is why people can get so heated in debating religion, politics or sports. What seems obvious to us just isnt in their paradigm of the world So hang out with weird people and when an outsider looks in with curriosity, welcome them in and help them out. Because to court this group takes courage. and that spark must be nurtured.

Why Doesn't Everyone Invest In Real Estate?

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

"I always ask this question on Google but there's not an answer that answers it."

That's because there is not "one answer". This is the short list of reasons why...of which many are combined, and most are excuses, to form the basis for the "why":

1 - Fear of....<fill in the blank>. Some of the fear has nothing to do with REI

2 - Lack of knowledge...

3 - Lack of drive

4 - Would rather make excuses

5 - Would rather blame others or their circumstances for their failures

6 - Laziness

7 - Procrastination

8 - Lack time, money, etc...(actually these "excuses" all go back to "lack of knowledge")

9 - Listen to others (such as the famous "everybody"...as in "everybody knows...") telling them "it can't be done"...and uttering those famous words of all failures..."it sounds too good to be true".

10 - Would rather not listen to the one person they know that is successful, because .....they would rather listen to the majority that have failed.

15 Reply

David Faulkner

Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes

9y

Or

11 - They have another business that they know better and makes them more money than investing in RE.

Not everyone that chooses NOT to invest in RE is a lazy idiot ...

15 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

Originally posted by @David Faulkner:

Or

11 - They have another business that they know better and makes them more money than investing in RE.

Not everyone that chooses NOT to invest in RE is a lazy idiot ...

If you read deeper into the original question, it can easily be interpreted as "what's stopping people" that might want to...not necessarily why people don't need to. I don't think the original question pertains to them.

2 Reply

Ryan D.

OP

New to Real Estate · United States · Member since 2017 · 27 posts · 21 votes

9y

@Joe Villeneuve and @David Faulkner

Thanks for your answers, I knew it was a variety of reasons but I wasn't able to completely pinpoint what those reasons were. I appreciate it!

1 Reply

Brian Pulaski

Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes

9y

Same reason why everyone doesn't invest in the stock market when they do have money. Working multiple jobs is guaranteed (not 100% but nothing is) that you will make money. You agree to hours and a rate and that is what you perform and you are paid. It is comfortable. Real estate investing you are not guaranteed anything and could lose a TON of money.

4 Reply

Jim D.

Investor · United States · Member since 2015 · 415 posts · 487 votes

9y

It's always good to look at opportunities with that mindset ("if this deal is so good, why hasn't someone else bought it?") It's an open market, so if there's real value in a deal you're right to question why it hasn't already been taken. However, someone has to be the first to spot the value, and sometimes that's you. There's a joke where two economists are walking down the sidewalk when they pass a $20 bill. One says, "Hey, is that a $20 bill in the street?" The other replies, "It can't be--if it was, someone would have already taken it" and they keep walking. As far as real estate goes, most of the people I know who don't invest a) are not aware you can get far better returns than the stock market or b) don't have the patience for the illiquidity.

6 Reply

Austin Fruechting

Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes

9y

If eating clean and regularly working out is a great way to become healthy, why isn't everyone doing it?

41 Reply

Joseph M.

Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes

9y

I have thought about this same question before in the past . But i think top reasons would be they view it as risky and don't have the knowledge . Investing in real estate is more running a business really . There are more moving parts . You have to deal/interact with people etc . With a 401k or stock account an employer just has everything setup for you and it's pretty much on autopilot. People also probably imagine that it's more time intensive . Lots of "horror stories" of people telling them about having to fix toilets in the middle of the night or having to evict tenants . Working a job it's pretty much autopilot too you show up , work a certain number of hours and get a paycheck. Also some people actually enjoy their job so they aren't going to have as much motivation to quit and invest in real estate . Another thing is that the media overwhelmingly seems to say that the stock market is a "better" investment . Another thing is there might be more people invested in real estate than you might imagine. There are quite a few mom and pop investors in L.A that own rentals but also have full time jobs .. of course it's harder now that most properties don't cash flow and the prices are so high but that's another story . In that case to find a cash flowing property they have to look far away and might not want to own out of the area so that's another reason they would invest . Places like L.A , San Francisco , NYC don't make sense for cash flow these days.

0 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

Originally posted by @Brian Pulaski:

Same reason why everyone doesn't invest in the stock market when they do have money. Working multiple jobs is guaranteed (not 100% but nothing is) that you will make money. You agree to hours and a rate and that is what you perform and you are paid. It is comfortable. Real estate investing you are not guaranteed anything and could lose a TON of money.

See #'s 1 and 2 in my list above

0 Reply

Chris Martin

Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes

9y

Most people think real estate is a good idea when the market is up and has been up for a while, like now. Here's a think RE is the best long term investment, compared to 26% for stocks. In August 2011, 19% of people polled thought RE was the best long term investment.

2 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

Originally posted by @Chris Martin:

Most people think real estate is a good idea when the market is up and has been up for a while, like now. Here's a think RE is the best long term investment, compared to 26% for stocks. In August 2011, 19% of people polled thought RE was the best long term investment.

Who were the people that were polled. Makes a huge difference.

1 Reply

Chris Martin

Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes

9y

Originally posted by @Joe Villeneuve:

Originally posted by @Chris Martin:

Most people think real estate is a good idea when the market is up and has been up for a while, like now. Here's a think RE is the best long term investment, compared to 26% for stocks. In August 2011, 19% of people polled thought RE was the best long term investment.

Who were the people that were polled. Makes a huge difference.

The methodology is at the bottom of the page. . Just open the link to see how they survey.

0 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

Originally posted by @Chris Martin:

Originally posted by @Joe Villeneuve:

Originally posted by @Chris Martin:

Most people think real estate is a good idea when the market is up and has been up for a while, like now. Here's a think RE is the best long term investment, compared to 26% for stocks. In August 2011, 19% of people polled thought RE was the best long term investment.

Who were the people that were polled. Makes a huge difference.

The methodology is at the bottom of the page. . Just open the link to see how they survey.

525 Adults full or part-time employed

617 non-retirees

337 retirees

617 Stock owners

678 homeowners

Q: Which of the following do you think is the best long-term investment -- [ROTATED: bonds, real estate,

savings accounts or CDs, stocks or mutual funds, (or) gold]?

More interesting is the results in order based on the year:

National Adults

Year REI ST/MF Gold
2016 1 2 3
15 1 2 3
14 1 2t 2t
13 1 3 2
12 2 3 1
11 2 3 1

Stock Owners

Year REI   ST/MF Gold
2016   1    2   3
15   2 1    3
14 2 1 3
13 2 1 3
12 3 2 1
11     3 2 1

...Notice they didn't ask Real Estate Investors that same question.

1 Reply

Chris Martin

Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes

9y

Yes, 67.68% of poll respondents own real estate. 60.79% of respondents own stock.

0 Reply

Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

9y

Originally posted by @Chris Martin:

Yes, 67.68% of poll respondents own real estate. 60.79% of respondents own stock.

I must have missed where they said that. Where did they say that

0 Reply

Naum Raz

Investor · Brooklyn, NY · Member since 2016 · 56 posts · 40 votes

9y

Like people mentioned there are many reasons why people don't do it. But one major one I would say is that people perceive a job as being secure, you go to work, you do what your boss tells you and you get your paycheck. Real estate is more uncertain, it's essentially a business you're not guaranteed to have rent coming in, you are not guaranteed appreciation and so on and so forth. Now you might say a job is also not guaranteed. I agree 100% that's why I said people perceive it to be more secure. But recently I read somewhere I don't remember the exact source that most people who became millionaires did so through investing in real estate.

0 Reply

Mike Dymski

Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes

9y

Contrary to popular belief, most people do what they want. Wishes are not wants. Most people want simplicity and security...no stress, leave work at 5:00, see their families and friends, watch their shows, check social media, hit the pool on the weekends, couple of vacations each year, and hit the reset button. I know a lot of very happy people who do not spend their lives trying to get ahead...they think we are crazy. We are all different.

6 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

9y

it usually always comes back to regions of the country... some areas real estate is not that great of an investment and can be a poor investment really..

In other areas it can set U up for life.

think of anyone who bought a bunch of real estate in the SF bay area in the 90s they are set for life .

think of the same people that paid top dollar in many Inner cities that crumbled.. or populations left. those investors lost money..

So if your raised around that or living around negative markets then real estate is not something you really aspire to.

go to any meetup or social gathering in the Bay ARea and 9 times out of 10 the conversation will soon involve real estate.

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3 Reply

Elbert D.

Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes

9y

well I think it's mostly because of fear....but there aren't a lot of people jumping into the stock market as much as many people think. Many people think the risk of stocks are way to risky so I think when it comes to real estate they might think it's much more risky. It's actually funny.... many people know they should invest or try to create multiple incomes but yet they don't.

Many people just talk a good game then sit back and do nothing. Some people know that creating a job for yourself and others is the main reason how many people became financially independent. But yet they do nothing to learn and act on going down the path of entrepreneurship/business owner.

2 Reply

Daren H.

Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes

9y

Because there is more than one way to get to heaven. All of us are not saints, yet I am confident more than saints are in heaven; if you believe in that kind of thing :)

0 Reply

David S.

Investor · Prairieville, LA · Member since 2015 · 311 posts · 424 votes

9y

Because there is no "EASY" button.

2 Reply

Maria M.

Entrepreneur · Naples, FL · Member since 2017 · 42 posts · 20 votes

9y

1. the biggest of all FEAR

2. Lack of knowledge or too much ( and don't do anything with that abundance of knowledge )

End up thinking that they need to know everything first before taking the first step.

3. Procrastination

4. listining to the so called GURUS that mess it up most or a lot of the time. I dont have anything against GURUS , but they always end up emptying peoples pocket first , and then the students have nothing left to start . Reading books (GOOD ONES) helps a lot .

5. They make it too complicated . Real estate does not have to be complicated.

Hope this helps. If not, sorry .I tried . All the best.

2 Reply

BJ Henderson

Raleigh, NC · Member since 2016 · 86 posts · 26 votes

9y

I'm sure there are plenty of reasons why they don't. I think the biggest would be fear, followed by thinking they need loads of money to get started.

I have had many a conversation with peers who I "try" to explain what it is I do whether it be wholesaling, lease options, flipping, or renting out homes, and to be honest they just don't get it.

I've been told..."Real estate investing is a tough business." Or..."You need hundreds of thousands of dollars to make any kind of real money doing that.

Their lack of knowledge of the industry coupled with what they've been told by imposters that know nothing about real estate really makes for an upsetting conversation for me often.

There was a time when I wanted to share my knowledge with many of my peers, but then I soon realized even when you show them the checks they still continue with the lives their accustomed to living because of the work involved.

2 Reply

Account Closed

Investor · Scottsdale, AZ · Member since 2016 · 1k+ posts · 885 votes

9y

Champagne dreams and beer mentality

1 Reply

James Mabe

Investor · Winterville, NC · Member since 2015 · 47 posts · 93 votes

9y

Because they can't. Many Americans will be lifelong renters. Especially with college debt, auto debt, credit card debt, video game debt, cell phone debt, personal residence debt, etc. Get on the right side of debt.

2 Reply

Why Doesn't Everyone Invest In Real Estate?

Why Doesn't Everyone Invest In Real Estate?

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