InvestorLoft Real Estate Investing Blog

Why don’t most people invest in real estate?  Of course, the most common answer is easy – it’s RISKY.  If RISKY is your answer, you’re right about the term, but wrong about the association.  The biggest risk one can take is by simply NOT INVESTING.

The conventional wisdom on this topic never ceases to amaze me.  How many people have achieved true financial independence by doing nothing more than working a 9-5 job, earning a weekly paycheck and doing so day in and day out until retirement age?

Most people, whether it’s through the company they work for or some other investment vehicle, inadvertently rely on investing money earned from their weekly paycheck in hopes that it eventually will grow into a substantial retirement nest egg.  This sidekick approach, set it and forget it, often times is still not nearly enough to get rid of the ever-present FINANCIAL BUDGET.

Knowing this, the question begs WHY would you want to follow this same approach?  In terms of financial independence, if this was the best way of generating wealth then why aren’t most people financially independent?  Why is it that many of the so-called RISK TAKERS are the same people who don’t have to worry about money?  As you take a closer look, you will begin to realize that most of these so-called risk takers have achieved financial independence by investing their time and financial resources into building businesses, investing in various financial markets, and of course real estate.  Their main financial generating activity is investing!  Regardless, most people begin and quickly end their investing pursuit paralyzed by legitimate yet fearful questions that ultimately close more doors than they open if they don’t work past these initial hurdles.

“What if I lose money?”  YOU WILL. No matter how good you are, it’s impossible not to lose on some investments.  The great thing about investing is that you don’t have to be perfect; you simply have to be good enough.  Let’s say you’re rehabbing homes and, over the span of a year, buy, rehab, and sell 10 homes.  In this scenario, let’s say you average losing $20k on each of 3 homes while averaging a profit of 15k on each of the remaining 7 homes.  Yes, only a 70% success rate.  Perhaps not as good as you had hoped for, yet good enough to have earned $45k when the dust settles.

“I don’t have any money.”  You DO need money, but it DOESN’T have to be yours or the bank’s.  I’ve read and listened to many real estate investing experts who say that if the deal is truly a good deal, you will find the money.  In my experience, this is true.  Mind you, it’s not going to fall in your lap.  As with nearly everything in life, education is PARAMOUNT.  You have to actually LOOK and know what it is you’re looking for!  The bottom line is people want to make money.  Therefore, your job is to use real estate to create opportunities that enable people to do this.  People will be willing to invest in you if you can create money making opportunities for them.  Again, if you know what to look for, deals simply abound in every market regardless of homes appreciating, depreciating, or simply holding steady.

“I just don’t have the time”.  Funny, considering you invest the time to create a resume, the time to look and interview for a job, and once you’ve obtained a job, you usually work 8-hour days, 40-hour weeks, and 48 weeks out of the year learning the ins and outs of your position.  You have time to pay your bills.  You have time to go to the movies.  You have time to eat breakfast, lunch, and dinner.  Yet, when it comes to real estate, most people will never MAKE the time even though their greatest source of wealth usually comes from the home they have lived in for years.  Knowing this, why wouldn’t you devote an equal amount of time and effort learning how to tackle and overcome these hurdles?

In our next post, we will discuss where to start, the importance of investing your time to learn the fundamentals, overcoming your fears to conquer these hurdles, and why I think real estate is an incredible vehicle to start with nothing to create a big financial something!

Special thanks this week to our guest blogger, Roger Billeci of PropertyQwest.

If you like what you’ve read here today, follow Roger on Twitter!

The content in this blog is not affiliated with nor is it endorsed by InvestorLoft.com and contributors receive no compensation for submitted articles. All articles submitted to InvestorLoft are subject to editorial review. Please seek the advice of qualified real estate, tax and financial professionals before investing in any project or opportunity. InvestorLoft does not provide tax or legal advice and any and all content herein is provided for informational and educational purposes only.

Where are the good real estate investment deals these days?

There’s definitely no shortage of hot investment property floating around out there these days…but where do you go to minimize the “digging” for good deals?

How do you know what markets are hot, lukewarm, tepid and just plain ‘ol cold?

There are a ton of resources floating around out there on the web that are ready and waiting to provide you with timely, market-relevant information to aid in an investor buyer’s decision. This week’s blog post is a compilation of these resources, and we hope that if you have your own tools, you’ll share them with us in the Comments section below:

• Interactive Maps from NAR: Check out the interactive maps for Median Home Price and Existing Home Sales by State
   
• FinancialDynamix from InvestorLoft: Sure, we’re pimping our own ride here a bit, but every property on the site has a built-in calculator attached to it. Once you conduct your search by cash flow, cap rate, cash on cash return , downpayment and more, click on the “View Financials” tab of any property on our site an run the numbers real-time. Find out if it’s just a good price or also a great investment.
   
• Keep Tabs on Forbes.com: They regulary publish great stories like Where US Home Sales Are Rising , America’s 25 Strongest Housing Markets , and America’s 25 Weakest Housing Markets.
   
• Data Sets from Cyberhomes.com: When you log into their home page, they’ve done some preliminary sorting for you. View Home Values, Going Fast Listings (high page views) and more and explore their Real Estate Markets section for timely news and insights. 
   
• Do Some Simple Math: There’s no shortage of doom and gloom in the daily news about the real estate markets and which have been hardest hit. Florida, Nevada, Arizona, Colorado, California – they’re in the blogs, online and traditional news reports and on the tips of every professional in the industry. Here’s a tip: start with THOSE cities for finding great investment properties. Foreclosure rates are high, inventory is plentiful, and with a little elbow grease and math, you just might find your next cash flowing gem!