Successful real estate investing requires making educated decisions. It’s not a get-rich-quick scheme. Although many people approach it this way at first, those who are educated understand that this is only an expensive form of gambling. Investing without learning the tools can wipe you out before the ink is dry on your first deal.
Hopefully, you’re reading this article before you’ve taken action in your investment business, but if not, you can always begin again from wherever you are now. You may have come across speakers selling expensive programs promising overnight success. Don’t be tempted. If you want to learn about real estate investing part-time or full-time and are interested in building wealth over time, read on.
Real estate investing in the US has made people wealthy since the birth of our country. Modern day investors still build wealth using decades-proven methods to grow their businesses. Things have changed a little with the times, but many principles remain valid.
What does it take to be successful as a real estate investor? The fact that you’re reading this article indicates you already have some of what you need. One of the most important elements is a mindset.
Investors are Entrepreneurs
Unless they’re investing as a hobby (which is also okay) successful real estate investors recognize they are also entrepreneurs. They are in business and they approach investing that way. What does it take to build a successful investment business?
Educated entrepreneurs know there is a relationship between producing cash and generating income. They also recognize the difference between producing cash and using their earnings to build wealth. These foresighted businesspeople invest in themselves and their businesses because they know this is the key to long-term prosperity.
Part of your success as an investor is being able to develop a long-range vision; knowing the end goal. End goals motivate the action required to reach them.
Throwing cash at every opportunity that comes along—without qualifying it—is nothing more than a sophisticated form of gambling. It’s not investing. Investing is a risk with an element of certainty built in. Take your time. The more educated you are, the less risk. Gambling is little more than wishful thinking.
This doesn’t mean you won’t be able to quickly identify good investments in time. Once you know what to look for, the time between prospecting and purchase collapses and your deal-making becomes easier and more predictable.
Part of your success as an investor is being able to develop a long-range vision; knowing the end goal. End goals motivate the action required to reach them. If you’re not sure of what you want, how will you know what will get you there in the long run?
Types of Investors
There are many types of investors. Some choose to build wealth by middle-manning contracts. They buy properties and before the close of sale, they sell contracts to other investors in their networks.
Many investors buy as-is properties at well below market value, bring them up to code and make a few improvements before flipping. They buy low and also sell low at a profit.
Some investors don’t even get their hands dirty. They work with a team of contractors and handy-people who make the improvements. You’d be surprised at how much more you can resell a property for by carting away debris and landscaping.
Other investors generate income through passive residual income. These are the landlords and property owners. They buy multifamily dwellings or homes, lease them and collect a check every month with little or no effort on their parts. Now, although some make tidy livings with this form of investment, there are easier and quicker ways to build wealth.
Knowing which area of real estate investment is right for you comes as you learn more about the business. Your knowledge base will equip you with the mindset and ability to look for real estate opportunities that will build wealth in a business you also enjoy.