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.
Why not turn this thread around and talk about ONE stumbling block that delayed investing in real estate. And then ONE or TWO breakthroughs that allowed you to start on this REI journey.
ONE stumbling block:
My career. There are few careers that take a decade or more of training, sweat/tears to reach the final goal. When the 2008-2009 financial crisis occurred and my home was under water, it was barely even on my radar. I was so focused on what I needed to do in my career that I totally missed a tremendous opportunity. Also, I become an accidental landlord without much thought or effort since I had such a singular focus on my training/career. Unfortunately, being a landlord of my former primary home did not make me an investor at least not for almost 4 more years.
ONE breakthrough:
For the last 6+ years, I've had very long commutes. Like many people, I listened to the radio. But when I discovered podcasts, I started to gravitate towards entrepreneurship (Pat Flynn - Smart passive income and investing - specifically real estate investing). I was so excited to get started but had no clue. Thankfully I ran into an old college buddy who had already some experience and showed me the way to my first deal with out of state turnkey provider in texas. If I was not already prepped with some knowledge of investing, my meetup with that old college friend would not have been as fruitful as it was. I went from negative net worth to 7 figures in 4 years time.
ONE big motivation:
Growing up in 1st generation immigrant family, I saw my parents work 100+ hour weeks - 7 days a week. I could never work as hard as they did but their work ethic rubbed off a little bit on me. But my biggest concern was that they had very little to show for except for raising us kids right and sending us to college. When I finally learned about investing in my late 30's/early 40's I saw how the "American Dream" usually takes 2 generations to fulfill. First generation immigrants can prepare the soil and plant but very little fruit is harvested until their kids grow up. The secret MISSING ingredient is investing. To this day, they cannot grasp this concept beyond investing in the stock market (and doing it very poorly).
This missed opportunity that I see in my parents motivate me to learn and invest so that my kids can not make the same mistake.
I'm sure everyone has had ONE big stumbling block, ONE big breakthrough, One big motivation (there are so many other factors but interested to hear what the big ones were)
1. It takes money to get into. That's a huge barrier for most people.
2. Even if they have money, maybe they know a better business. Bill Gates did pretty well with computers, for example.
Del Walmsey said it best , RESPONSIBLE people only need apply! the rest have 2 go thru Dave Ramsey kindegarden class first........................lol.
Hard work is hard and lazy people are lazy. When one meets the other they clash like oil and water!
Going to school to become an anesthesiologist, surgeon or pedodontist are great ways to become much more wealthy than the average median wage earner investing in 200/door cashflow, why doesn't everyone do it? Desire.
Totally agree but always like to make the following point:
I know this is contrary to popular belief, but the ROI for surgeons and medical professionals (17% ROI) is actually significantly lower than for MBAs (27% ROI).
This is because of foregone wages, foregone 401K contributions/matching, foregone investing and because of very large student loan balances.
Many MBA students don't forgo wages OR pay for tuition as employers have tuition reimbursement programs.
Doctors and specialists have 8 - 12 years of schooling plus years of residency at low wages.
A person who studies finance, accounting or economics is at a great advantage in comparison, especially if that student understands the concepts of investing and compounding interest.
But I understand that your comparison wasn't doctors and bankers.... It was doctors and median wage earners. Obviously your point is valid but I always enjoy this topic as everything thinks doctors are ballers haha
I just spent several days doing deep dive interviews with people who are determined to get into real estate investing about what is holding them back. What I found is that there is a lot of fear of loss or making a mistake, and there is the knowledge that there is much that they don't know, and this reinforces the fear.
These are the people who are so highly motivated to get into real estate that they are researching everything everywhere and reached out to me for help. Almost all of them are very sophisticated, skilled business people, with access to funds - their own and others'. And yet they are consumed with fear and their own lack of knowledge.
If some of the most highly motivated and highly qualified people are stuck this way, imagine how it must be for everyone else.
It's more a barrier to entry than anything else. Simply put, you need money if you want to buy and hold. Time is also a factor especially for those who hold full-time jobs. Putting money into paper assets (aka the market) makes it relatively simple and easy for most who want to grow their money for the long run. Though, it does take a lot of time and returns may be less than other ventures (aka real estate, businesses, etc). People invest according to their level of risk.
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!
One thing I haven't seen touched on in this thread is time and volume. Unless you get really lucky with appreciation in your area it takes a lot of volume for your income to really make a difference. Getting a lot of properties generally takes a lot of time. Not to mention work.
As a newbie, I thought I'd chime in to let you know what took me so long to get to BP and interested in REI. I have a good job that I enjoy, and though I'm familiar with passive income podcasts and such I am not dying for another gig or to stop working right now. My life is pretty great!
I know no one who invests in real estate as a primary or secondary job. I know PLENTY of people who are underwater on their homes. My family members are not financial whiz kids to say the least. The most successful family members I have have just saved a lot of money and taken on minimal risk. Only one has purchased two vacation homes and has left them with no maintenance or upkeep for the last thirty years. They are now a headache and an expense to refurbish. I am not a handyperson by any means so rehabbing is out for me.
I am debt free except for my mortgage on my home, which is a two family (duplex) that I rent to a family member. So I have some extra cash that I would like to start putting to work somewhere that isn't a 401K.
I initially found BP a couple months ago, if that, while researching Airbnb investing since I happened to meet someone who bought a place in a vacation area of New Hampshire and had a PM taking care of it for him. He was cash flowing a few hundred bucks a month, though I doubt he was taking capex and other expenses when telling me that figure. In any case it made me think hmmmm that sounds interesting.
I'm looking to buy and hold and currently focusing on turnkey research but more than anything right now I'm looking to learn. I am spending time ordering books from the library, listening to BP podcasts and reading these forums to learn as much as possible. I understand the fear factor because it does seem like there's a ton to learn and I don't want to get into something without knowing what I'm doing, but a certain learning period is understandable.
Had I not met that person that had that one investment property I may never have stumbled across BP. And honestly - I would have been OK had I not gotten into REI, I'm in an OK financial position. But I would like to diversify my investments and growth is always welcome, so here I am!
I agree, it is exposure and resources. Well, and maybe more than anything drive, determination, and success in general. There is way too much programming in the world to work hard, save and be risk adverse. Additionally, I would say the average person is consumed with surviving, not exploring ways to get out of the hole. I struggle at this point (being brand new to this) with wanting people to also have the same successes and needing society to be like it is to be able to pursue long-term buy and hold. On one hand it feels like taking advantage of others misfortune... and yes I have parts that know we are providing a service, I will get good feelings from providing quality safe places to live.....and it is a business...just some thoughts