The ABC’s of real estate

Sun, Nov 25, 2012

Financial Advice, Investment

The real estate world can be a daunting one to enter. The fact of the matter is that it’s hard enough when you have a solid road plan, but even harder without guide posts to follow along the way. Everyone you talk to will give you different advice, just as they would in any professional field. The truth is that there is no step 1 through 10 approach to real estate investing that will guarantee success. It’s better to simply know that there are a few basics to understand that can give you a great head start on your way.

Money Talks. What keeps most out of real estate is the misunderstanding that it takes someone already wealthy to be able to afford to buy and sell houses successfully. This, simply, is not true. The fact of the matter is that if you make good enough deals, others will line up around the block to invest in the opportunity. Making a deal with sound financials is the key. Your first time finding investors will be hard, true, but the more you prove yourself as an entity, the easy it will become to make these deals go through. Often times, the money out of your own pocket? Zero.

Flipping the deal. Real estate investment, to those uninformed, is an endless stream of flipping properties that result in piles of easy money. The truth of the matter is that looking at real estate investment in such a way is like looking at the stock market in terms of day trading. It’s certainly not easy, and incredibly risky. Of course there are those that have made money doing both, but for the rest of us (less lucky majority) this option simply isn’t viable as a long term strategy. Know going in that you need to concentrate on longer term goals, and you’ll eventually find that you can much more safely reach the finish line.

Timing is everything. For those considering real estate investing as a way to earn a good salary on the side of their regular work, the time commitment can seem to be too large and consuming. While there will be hours that will have to be put in, the fact is it all comes down to a choice of priorities. Especially in the early going, the time commitment might be day-to-day. If you are the type of person that finds challenges rewarding and fun, and what’s more find that the resulting profits to be equally rewarding, then the “commitment” changes into something more like a pleasure to be had during your week. Eventually, as your business grows, you can afford to bring others in with your work, and lighten the load.

As stated before, there is no real set in stone way to succeed in real estate. Always remember that there are many more “myths” out there than stone cold facts. For those that prepare themselves correctly, however, the field can open to a great wealth of opportunity, risk, and reward.

Ed Michelson is an expert in real estate who buys and sells homes for We Buy Ugly Houses.

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One Response to “The ABC’s of real estate”

  1. Lance Says:

    The saying in real estate has always been great advice. You make your money when you buy.

    Reply

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