In part 1 of this blog series, I discussed the very real possibility that things will not always go right in your real estate investing career. Though I’ve had way more successes than failures while flipping houses, even the successes are sometimes only achieved after putting out a few fires, and sidestepping a few land mines on my way to the big payout. It’s important to be prepared for what the flipping business might throw at you, and make sure you have an effective plan in place to respond to such challenges.
The second thing that you “might not know about real estate investing” is that it’s not as easy as they say on late night TV infomercials. It’s normal to get excited after attending a seminar or watching a late night infomercial and hearing all the success stories and 5-figure checks that can be made “in your spare time!” The last thing that I want to do is dampen anyone’s enthusiasm, as I’m a firm believer that optimism and a positive outlook are key factors in achieving success in business. But unfortunately, those trying to sell books and CD’s are oftentimes quite long on optimism and feel good stories, but a little short on realistic expectations.
There is an ancient Chinese proverb that says it best, “Pearls don’t lie on the seashore. If you want one, you must dive for it.” Or perhaps you’ve heard your wise old grandmother say it this way…”if something is worth having, it’s going to take a lot of work.” In our microwave culture of instant results, most people find it disappointing to learn that a successful business isn’t built overnight. In fact, there are no “overnight success stories”. Talk to most successful actors, entrepreneurs, and investors and they will tell you the same thing. After 10 or 20 years of hard work…BAM! They were suddenly an “overnight” success!
The one thing that the infomercials DO get right is that real estate investing is a very SIMPLE business. It doesn’t take a college degree, years of study, or an I.Q. over 150 to master creative investing techniques. The principles of making big money in real estate are quite rudimentary. Step 1 – Find motivated sellers, negotiate a good price, and then either renovate to sell to a retail buyer or quick flip to another investor. Step 2 – Build a war chest of money so you can start holding properties to build wealth and passive monthly income. Step 3 – Repeat steps 1 & 2 to get really, really rich.
——>>>> “Flipping Houses You’ve Never Seen” <<<<——
——>>>> “Big Profits from Ugly Houses” <<<<——
——>>>> “7 Great Online Tools for Rehabbers” <<<<——
So, if it’s so simple, why do so few people do it? The same question could be asked of those looking to lose weight. The concepts are simple – eat less and exercise more – and yet so few people do it. The reason is that just because something is simple doesn’t mean that it’s necessarily easy. Our society has increasingly grown a sense of entitlement over time, and very few people truly want to work hard. Late night infomercials cash in on this “something-for-nothing” mentality, positioning the real estate business as some kind of guaranteed lottery ticket. And they do people a great disservice by peddling that sort of nonsense.
Dave Ramsey, financial guru and radio host, often tells his listeners of the time he sat down with a billionaire to ask for advice on how to become wealthy. The billionaire told him he had a great book he wanted him to read, and that it would tell him everything he wanted to know about becoming successful. Dave quickly got out a pen and paper to write down this unbelievable piece of business literature that was going to transform his life. “The name of the book is The Tortoise and the Hare,” quipped the billionaire, “and every time I read it….the tortoise wins.”
The real estate investing business IS very simple. But nothing worth having in life is easy, and real estate is no exception. There are certainly numerous ways to set up a systematized business and EVENTUALLY be able to work very few hours and make HUGE money, which is why I LOVE real estate investing! It’s still by far the best way for everyday people to make enormous amounts of wealth and positive cash flow. But don’t be deceived by pie-in-the-sky infomercials or slick seminar presenters. It doesn’t happen overnight, and it does take work on your part. However, like the hare in the story, if you are willing to make the right decisions CONSISTENTLY over time, you can achieve whatever goals you set for yourself. Whether it’s to quit your job, create a better retirement, or just make a little extra play money…real estate can definitely be the means to your end.