The Best Way to Reach Your Real Estate Goals? Stop Focusing on Money & Ask Yourself THIS.

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What do you want?

That’s the question. I ask this question a lot, and surprisingly, most people don’t really know. We’re not talking about money, bedrooms, bathrooms, cap rates or any of that. Those are only a means to get what we truly want. What we want runs deeper than that. If you know the answer to this question, you open a world of opportunities and save a lot of time and money. Let’s look at two examples.

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New Investor Example

Most of my clients dream of being able to work part time and travel. That’s why they want to start investing. But when I ask them what they want, they tell me high cap rates, distressed properties, cheaper properties they can fix up and as much cash flow as possible.

The problem with this logic is that those properties are in areas where good tenants don’t want to live. They have higher vacancy rates, high eviction rates, and managing/fixing them will require giving up even more of the very thing these investors want to save. Their actions don’t get them to what they truly want. Why? They don’t really know what they want. When someone doesn’t know what they want, they always focus on money.

Related: Stop Dreaming & Start Doing: How to Turn Big Real Estate Goals Into Actionable Steps

The best way to get more time and freedom in the future is to buy in areas with young professionals, areas with a high proportion of families and areas with good schools and to buy fewer, more expensive properties. These properties have lower cash flow and cap rates, but they get you to where you really want to be.

The metric (money, time, freedom, etc.) you focus on determines the direction you go and ultimately where you get to. If you want to go North, don’t start by running South really quickly.

Seller Example

The traditional way of talking with sellers:

You: How much do you want for your property?

Them: $200,000.

You: I’ll give you $195,000.

Them: $197,000 and no repairs.

You: Deal.

The benefits of finding what they really want:

You: Why do you want to sell?

Them: I’m moving to Nevada.

You: What are you going to do there?

Them: Well, I’m retired and have a ranch out there, so I’m going to live there.

Related: 5 Daily Habits to Help You Steadily Reach Your Entrepreneurial Goals

You: Is your retirement enough?

Them: No, but I’ll make do, and I’m selling this house.

You: Do you have a loan on this house?

Them: No.

You: Would you consider being the bank and selling it to me? You’ll save thousands on selling fees, and I’ll pay you interest every month (less than a bank would charge) that will leave you with a lot more in the long run. We’ll both save money.

Them: That would be great.

When you know someone’s real motivation, you can find alternative ways to get what you want. If all you talk/think about is the wrong metric (money) and don’t identify what’s really important, you lose out on a lot of opportunities.

Ask yourself what you really want. Now compare that to your investing strategy. Is it going to get you there?

Let me know with a comment!

About Author

Brett Lee

Brett Lee is a licensed Real Estate Broker in Portland Oregon where he helps people achieve a better future so they can do the things that truly make them happy. Brett is also a buy-and-hold investor, property manager and investment advisor.

6 Comments

  1. David Roberts

    I struggle regularly with do i buy 2 40k homes or 1 80k home. I have been buying 55k brick ranche homes fixing up for 25k and appraising at 105-110k, which cash flow at 400+ a month. But i could take the same money, buy 2 30k all in at 45k each and get 400 off each. But i don’t like the areas as much and that worries me long term. But i don’t know how much more work they are as never bought a home in a lower area. There are investors around me buying them up and I’m hearing nothing negative from them.

    But pros on this board typically recommend to stay away from those. I think they require a different refi strategy also being a lower loan amount.

    • Brett Lee

      Most sellers are willing if you have a high down payment and I’ve had several sellers think it was a great idea. The key is to find people that are retiring and no longer have loans. They love the idea of a paycheck every month with no responsibilities. If it’s a younger person they usually have somewhere they want the money to go so they want it all now. And, it never hurts to try. I plan on doing something like seller financing when I retire so I don’t have to do the day to day with rental properties anymore.

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