Usually when we see titles like that about real estate investing, we assume the message will be to take action in one form or another, especially buying. Not so fast, propaganda breath. 🙂 Lookin’ back on my career as an adviser, and with very, very rare exceptions, 30-40% of those asking me what they should do are told to stand pat. You shouldn’t be surprised. Some are in such great position it’d be criminal to change a thing. Some are in such terrible position there’s virtually nothin’ they can do right then that offers a reasonable chance of ending well.
The 20 Best Books for Aspiring Real Estate Investors!
Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.
Not Everyone Should Buy Now, or Make Changes to Their Portfolio.
Regardless of whether the market is welcoming, accepting it’s invitation is simply never universal. It’s about each investor’s specific status quo. Surely this is a Captain Obvious observation, yet so many seem to adhere to a more universal mindset. Sometimes it’s far better to stay on the sidelines as you deal with either adding and/or eliminating various financial/investment factors aimed at improving your current position.
The Key is Always to Understand Where You are Now.
When making any real estate investment related decision, whether as an experienced veteran or as a rank beginner, knowing where you are now is pivotal. Your financial status quo can’t ever be unknown to you, even if only a small part. Again, pretty obvious stuff. But in the last month or two I’ve been able to guide several callers/emailers to stop and think about what they’re proposing. Your financial house must not only be in order, it must be protected by overly generous cash reserves, cash flow at every turn, and the ability to deal with Mr. Murphy when he comes calling.
And he will show up at your door. Nobody escapes their turn in his barrel. Nobody.
So, I offer this exercise for you to consider. Start with a blank page, or a blank spreadsheet if you insist. Begin doing a detailed analysis of your entire financial life. Everything is on the table.
1. Household income, before and after taxes.
2. Lifestyle cost: What’s the total outgo of your family, EVERYTHING included?
3. What are your predictable monthly savings after taxes/lifestyle spending?
4. Are there expenses you can cut/eliminate? Is there waste?
5. How much debt do you have on your house if you’re not renting?
6. How much debt exists on cars, toys, plastic?
7. What’s your bottom line net worth?
If you learn nothing else with the completion of this very simple exercise it will be where you really stand financially. Once you have that picture — the good, the bad, AND the ugly, it becomes far less likely you’ll attempt something unwise. At least that’s my story, and I’m stickin’ to it.
Know where you are right now. It’s one thing to set a goal to reach your coveted Point B. It’s quite another to know exactly where Point A resides.
It’s always about context.