Every day, and every night, infomercials come on TV advertising a new program, scheme, or product that will make you wealthy overnight. Our culture moves so fast that we expect results immediately, often for little or no effort. And those schemes play off those expectations.
But that’s all they are: schemes. And real estate investing is not among them.
Real estate investing is a real way to make lots of money and to accumulate real wealth that appreciates over time. But it’s a real business, one that deals with real people, real property, and real complexities. It’s not a get-rich-quick scheme.
So what is it that makes real estate investing a real business and not a scam? Three things: time, money, and people.
Real estate investing takes time. Properties have all kinds of structures on them, but for the most part, the structure will remain in place for many, many years to come, if not forever. Communities change over time. Economic trends shift as well. And deals take time to close.
Real estate investing also takes money. It doesn’t take as much money as you might think, but it does take some start up capital to advertise your interest in properties in your area. Things like points and closing costs are sometimes better leveraged if personally financed personally
People are complicated creatures. That’s their beauty, and their downfall. And don’t let the number crunching fool you. Real estate is a people business. Hermits tend not to do too well at making real property investments. From the seller to the mortgage broker to the general contractor to the buyer or the renter, people are involved at all levels of the real estate business.
Time, money, and people all complicate the real estate business, individually. But real estate mixes them all up, and that complicates things even more. People for example, generally speaking, have very little time. And that means contacting people, getting the chance to really talk to them, meeting them to go over specs or perform walk throughs and inspections, all takes time. Your schedule has to be coordinated with their schedule.
And all that time adds up to money. After all, time spent talking to your general contractor equals less time you have available to make contacts and follow up on leads. Time spent driving out to the job site for three different scheduled inspections adds up to gas money that gets more expensive by the minute, it seems.
And the more properties you possess, the more complicated those factors become. After all, money spent on one job means money unavailable to spend on another, and that’s where some real hard choices begin to come into play.
So the next time somebody tries to sell you something, peek through all the smoke and mirrors and see if what’s on the other side is really all it’s cracked up to be. Real estate investing is not a get rich quick scheme.
In fact, it’s not a scheme at all. It’s a business. And it’s a business that can be very lucrative for the person willing and able to invest the time and the money and work with the people to achieve personal financial independence and success. Is it you?