You won’t get rich overnight
Sorry, it’s just not going to happen.
You will likely get rich someday if you stick with it. But that’s the key: sticking with it. Ninety percent of those reading this article won’t.
So when things get tough, will you lose your passion? Or will you fight through?
Stop listening to your crazy uncle
“I had rental properties once. I lost everything, including my shirt.”
Yes, I know your uncle had rentals and lost it all. Or maybe it was your cousin. Or your neighbor. Or whoever.
Everyone knows someone who lost a lot of money in real estate. Because failure does happen.
But does that mean it’s going to happen to you?
The truth is, a lot of people DO fail at real estate. But it’s not because real estate is impossible to succeed at. It’s not even because real estate is risky. It’s because real estate is hard. It takes work. It takes dedication. It takes a continual drive to keep learning, to keep improving, to keep growing.
So, if you aren’t willing to put in the work, to continually improve, to invest your nights and weekends becoming a better version of yourself, then fine, listen to your crazy uncle. But you’ll never experience the phenomenal life that awaits you.
Math matters — a lot
Repeat after me: “You make your money when you buy.”
What does this mean?
Simple — it means that if you don’t have the right math going into a deal, you’ll never get the right profit coming out of it. It means that if you overspend at the beginning, good luck ever trying to make money from the deal.
You have to buy it right up front. No one is going to come save you from a bad deal.
So understand that the math matters. The math is what tells you it’s a good deal. The math is what tells you that you’ll make cash flow. The math is what makes you a millionaire or another failed landlord.
The part that most wannabe rental property investors screw up is calculating the expenses.
Sure, there is the mortgage payment. And maybe some repairs. But that’s it, right?
There’s also utilities. And vacancy. And capital expenditures, like a new roof every 20 years. And management. And taxes. And insurance.
All these things are straightforward to estimate before buying a property — even before going out to look at a potential property, and forgetting one of these can cause huge financial problems.
The market today is tough… but doable
OK, I’ll admit it. The market today is different than it was five years ago.
Investors are coming out of the woodwork overpaying for crappy deals that I wouldn’t touch with a 10-foot pole.
So, does that mean you should shut down your ambitions and go back to playing World of Warcraft with your little sister?
It just means you have to be smarter than the average bear.
It means you need to be smarter, faster, and cleverer than other buyers.
Maybe this means starting a direct mail campaign.
Maybe it means driving for dollars.
Maybe it means setting up automatic alerts with your agent for new listings so you can be the first one to get new deals.
Maybe it means looking for deals that need some sweat equity.
However, you choose to do it, do it with all your might. Finding deals IS possible. In fact, I’m buying more deals this year than I ever have before despite the tough market. Because I’m willing to hustle when everyone else is waiting for a deal to fall in their lap.
Wake up, newbie. It’s not going to happen.
You must make it happen.