With all the infomercials on television and all the get rich emails you see in your email box, it’s easy to get swept up in the excitement of real estate investment. There is money to be made in real estate, but you have to know what you’re doing, have the cash reserves to weather the bad times, and you always need to remember that in order to be successful, you must treat real estate investment like the business it truly is.
One of the first things beginning investors often do is to begin looking at properties that are in need of substantial repairs in order to become profitable, whether as a rental or as a turnaround property. One of the key things they overlook is that they generally won’t realize as much profit as they originally expected, which can be disappointing, but it doesn’t have to be devastating.
For instance, if you believe, based on your extensive research and knowledge of your area’s real estate market, that you can make $10,000-$50,000 on a fixer-upper, don’t be surprised if you have to settle for half that amount in order to get the quick turnaround you’ll need to make quick profits. The property will often have to be discounted some in order to obtain a fast sale. But remember, a $5,000 profit still moves you in the right direction, and as a friend of mine once said, “There’s no such thing as a BAD profit.”
Businesses of any kind survive and grow by making a profit, and the same is true for YOUR real estate investment business. Take your profit, whatever its size, and put it back to work, generating more income for your business. Don’t get greedy. Most of the time, the only “stockholders” you’ll have will be your spouse and/or one or two close associates, so you don’t have to generate huge profits just to keep your shareholders satisfied.
Many beginners are lured into real estate investing by the promise of quick, easy money, but it’s NOT a get rich quick field. That’s the bad news.
The good news is that the vast majority of people who sign up for real estate investment seminars, some ninety percent, according to recent statistics, give up the idea within three MONTHS of taking the training. That means that your competition is much less than you might have thought.
Don’t let yourself become one of those negative statistics. Learn all you can about real estate investing, maintain a cash reserve for the lean times, and never lose sight of the fact that you are going into a BUSINESS when you become a real estate investor. It doesn’t have to be your sole income. In fact, it’s probably better if it isn’t your sole income at first. However, you’ll never achieve the success you desire if you don’t treat real estate investment as a business, from the very first day!
Copyright © Jeanette J. Fisher