Real estate investing is a long-term game, not a get rich quick strategy. You will not get rich quick in real estate. No matter what the gurus may tell you online, or what you may personally believe, being successful in any kind of investment takes time, effort, and some work. This commitment to the process is a major reason why so many people give up or never even get started. We live in a society where people seek instant gratification for everything they do. If they work, they expect to get paid at the end of the week. We have been programmed this way for so long that breaking from this can be difficult. Understand that getting into real estate will not make you money on the first day. It may not make you money in the first month, or even the first year! If you stick with it, learn from mistakes, perfect your process, and build connections with other local real estate professionals, you will find the success you seek. With real estate investing comes many unforeseen problems and circumstances, especially if you are newer to the industry. Understanding this from the beginning will train your mind to expect the unexpected, and be able to adapt and adjust when necessary.
But what if it fails?
The most common thing newbies are concerned about when they start investing or are starting to think about investing is risk. Every investment has some sort of risk to it that can’t be avoided, and in order to be successful you must understand this truth. Instead of judging real estate investing through the lens of risk, judge it through the lens of opportunity cost. How much money are you potentially leaving on the table by not taking the plunge into real estate? Will the risk of real estate investing be worth the reward of financial freedom? Is your 9 to 5 job really where you want to rely on your income from your whole life? The answer to these questions will allow you to understand whether it is worth it for you to start investing in real estate. Although there is risk, risk can be calculated and maneuvered to eliminate as much of it as possible. This is done by learning, experience, and talking to other people who have been there before. Chances are your first few investments might fail. You might not cashflow as much as you thought you would. There may be some costly underlying issues with the property you need to get fixed. You may break even or lose money on your first deal or two. This is all normal and learning from these experiences will make you into a better investor who knows what to look for and expect on future projects. Persistence in these scenarios is how you become savvier so that the same mistakes don’t happen again. The best lessons not only in real estate, but in life come from failure. Learn from it and persevere through it. Not many reach financial freedom because this reality is too much for them to handle. If you are able to manage expectations and deal with issues as they arise, there is no excuse why you couldn’t reach financial freedom.
The market
So many people use the current state of the market as an excuse to not invest. If a market is hot, the common excuse is to say, “I’ll wait for housing prices to go down to see if I could get a better deal”. These people often watch the deal they failed to capitalize on skyrocket in value over the next couple of years and beat themselves up over their decision. When the market is down, people become scared to buy real estate because they view it as extra risky. What so many fail to understand is the housing market, just like every other avenue of economics, is a cycle. Markets go up and down based on the state of the economy, supply and demand, and other factors that aren’t important for the purposes of this blog. What is important to understand is that the prices of property generally go up over time. The savvy investor views market crashes as properties at a discount, and grabs as many as they can in the areas they want to invest in. When the housing market crashed in 2008, many savvy investors from around the country bought a ton of cheap inventory. With the state of how the housing market has been going over the past decade, the people who did this have made a ton of money from their acquisitions. Battle through the social pressures and emotions that shape the public perception of the real estate market. Have the persistence and fortitude to move forward with your plans no matter the condition of the market. Don’t let hype or fear sway you from making the moves you need to make to reach financial freedom.
the long game
As mentioned in the first paragraph, real estate investing is a long play. It is not designed to make one rich overnight. Develop and hone in on your skills in your market and niche. Once you do that, you will better be able to repeat the process of acquiring real estate over and over again. Other investors and prominent real estate professionals will be attracted to your success and aid you in the growth of your business because they see your persistence and hard work. Through this, you will be able to unlock new avenues for growth and improvement, scaling your business faster and faster. Real estate will increase your net worth substantially over time if you invest in sound properties, as well as provide you will consistent cashflow that will enable you to live off of and be financially free. Be persistent and have the expectation that growth and success takes time!