So you want to invest in real estate — maybe a little or maybe a lot — but you’re not sure of how to get started. Maybe you have no plan at all or those late-night infomercials didn’t quite deliver on the step-by-step promises they were pitching.
Getting into flipping houses or any other real estate investment strategy isn’t one to take lightly. Recent history is full of people with dollar signs in their eyes that should probably have stayed in their old jobs for many reasons.
But here at the Top 3 Ways to Lose Your Shirt Investing in Real Estate
1. Think it’s going to be easy right from the beginning. News flash — this is going to be hard work. Second news flash — that’s actually a good thing. To quote Tom Hanks in ‘A League of Their Own': “It’s supposed to be hard. If it wasn’t hard, everyone would do it. The ‘hard’ is what makes it great”. I always love that quote. Be prepared for big change, especially if you’re leaving years of the 9-to-5 mindset to be a full time real estate entrepreneur. Get used to working into late night hours and waking up at the crack of dawn to pick up where you left off. Eventually, you’ll be able to put the principles of The E-Myth in place to be more of an entrepreneur and less of a ‘technician’, but one step at a time.
2. Go for the home run right away. The home run deals are fantastic paychecks, but it’s the singles and doubles that will keep food on the table for you and your family. And quite often, those home runs aren’t really deals at all — they just seemed so lucrative that it was easy to ignore the checks and balances and odds against them ever materializing. Get used to monetizing the regular cookie cutter deals over and over again using systems, then take down the home runs when they present themselves to you.
3. Try to reinvent the wheel. You’re not the first person to get the idea of flipping houses for big time profits. I know, big shock. But you’d be surprised how many people make the decision to become a real estate investor but have no plan for how to get from A to Z. They don’t have a plan to attract sellers, create a marketing system, raise private capital or work with the right contractors. They figure it out on their own — or at least try to — and waste so much time and money figuring out what people across the country already know how to do. What takes them 5 years to learn could have been 5 months.
BONUS METHOD: Ok, I’m not sure this category qualifies for a ‘bonus method’, but the last golden way to go phenomenally broke in real estate…..
SPECULATE. Yup, to work off tomorrow’s anticipated profits with today’s market. After all, it’s largely speculation that crashed the housing market a few years ago. No one has a crystal ball into the future. That’s not to say you need to be entirely risk averse, but the overwhelming amount of ‘noise’ out there — news bytes, opinion pieces, so-called experts, subjective housing data — can often influence us to think differently than our gut tells to do. In my opinion, if you’re going to speculate in real estate, you might as just go on a fun trip to Las Vegas. At least the drinks will be free!
Don’t Lose Your Shirt!