Yes, real estate has created more millionaires than any other type of investment. However, that doesn’t always means it’s a good idea to invest. Today I’m going to cover the four reasons that you should never buy property.
Will You Be Cursed?
The first reason has probably caused more investors to leave this business early on than any other reason. It’s what I like to call “the new investor curse”. The “curse” is wanting your first deal so badly, you’ll buy anything just to be able to say that you did a deal.
I remember that it took me 4 months and 12 days to get my first deal. And I remember for months begging my mentor to let me buy every property that I came across.
Every time that he told me that it was a bad lead and that no deal could be done, I would try forever to figure a way to make it happen. Luckily, I listened to that mentor and remained patient and never purchased a bad property.
You see, the reason this is such a fatal mistake is because if you make a bad investment on your first deal, then it will put a sour taste in your mouth. And you will be like so many people who say “this real estate investing thing doesn’t work”. So please have patience and take your time on your first deal.
Are You A Drone?
The second worst reason to buy property is because everyone else is doing it. People are like “drones” and often follow the majority. That’s how we got in this whole real estate mess in the first place. Everyone was buying real estate, so other clueless people followed.
Right now, is the perfect example of why you should be buying real estate. I don’t remember who said the following quote but, “if you want to be successful in life, look at what 95% of the people are doing and do the exact opposite”.
The third worst reason to buy property is because you fell in love with it–Leave emotions at the door. Remember this is a business and all that matters are the numbers. On every property make sure you can buy at a significant discount, make sure it cash flows and make sure it’s in the right neighborhood to attract quality of tenants.
If Money is Burning a Hole In Your Wallet Don’t Do This…….
The final and fourth reason is because you have money to burn. I think one of the greatest blessings that most of us experience (involuntarily) when we first get started is that we’re broke. We are forced to be creative and do no-money down deals because we don’t have a cent to our name.
However, I’m sure you know investors’ who’s parents left them money or who had good jobs and they bought real estate just as “something to do”. These people probably paid retail for the property and probably took on negative cash flow.
If you are fortunate enough to have money, I would still not advise using it to invest. Keep it in savings in an emergency fund. All successful entrepreneurs use other people’s money, even if they have their own.
I encourage you to re-read these crucial mistakes that investors make. Hopefully you can avoid them and have a long and profitable real estate investing career