Don’t Quit Your Day Job
I often get asked “Where should I start?” or better yet, “What would you do if you were me?”
If I were you? I would get started immediately! But that doesn’t necessarily mean investing in Real Estate. Here’s why:
I cut my teeth in the Real Estate Investing game at the perfect time to be in the Real Estate Investing Game. I knew this at the time because everyone told me how stupid I was for getting into real estate in 2009.
This was a combination of being introduced to the right books at the right time, investing my savings and income made from my first company into Kiyosaki Real Estate courses, and eventually just pulling the trigger on my first property purchase.
I was VERY fortunate. All of these factors had to come into play at the right time for me to succeed. Not to mention I was born in 1984, graduated college in 2007, and then fired from my corporate job in 2008. If I was born a few years earlier and things were different, maybe I would have invested in real estate at the worst time ever.
I know I am lucky, but I also know that I was willing to take the risk when others wouldn’t.
However, risk taking is easy when you are unemployed and living with your parents. It gets harder in your 30’s when you are married with 2 kids. I get this.
This is why I am very cautious when people ask me how they should get started investing in Real Estate. You can do all the homework in the world, but eventually you will have to pull the trigger.
So before you do, make sure you have the following covered:
It Must Cash Flow!
What does this mean? You should know by now, but if not here is a refresher. It should put more money into your pocket every month than it takes out.
If it doesn’t cash flow after mortgage, taxes, insurance, property manager fees and miscellaneous repairs, than it isn’t an investment. Its a liability. Even if its losing just $100 a month, you try and convince yourself its a good thing because of appreciation, and taxes and blah blah blah.
The problem with losing money on an investment is
A- It’s dumb to lose money on an investment
B- How many of these “investments” can you afford if its losing money every month?
C- You won’t get rich by losing money.
Which brings us to number two:
You Are Going To Use A Property Manager
I don’t care if you only own one rental property, use a property manager. If you don’t, you will never buy number 2. Trust me. I see it countless times.
Or if you end up being the exception to the rule and do purchase a second rental property, you become a full time land lord and your other income producing projects suffer or become non-existent.
You are investing in Real Estate, you are not switching job careers to property management.
Your Best Course of Action is to Purchase a Primary Residence, and then Rent It Out
The best wealth tool that everyone in America has access to is your mortgage on your primary residence.
It’s the best interest rate on any loan you can get, and its secured by real property. And you get access to a couple of these over your lifespan if you are smart about it. So be smart about it.
Don’t Quit Your Day Job
If you want to be a writer and you aren’t writing every day then you don’t really want to be a writer.
If you want to be an investor and you aren’t reading on your lunch break, listening to podcasts and audio books during your work commute, and attending seminars on the weekends, then you don’t really want to be an investor.
How will quitting your job make you a better investor? It wont.
So whats the secret to investing? Working your ass off. There is no free time. Time is money. Time is Valuable. Time is a rare asset.
Never in the history of the world has there been so many different ways to make money for anyone at any time in any country.
Before You Invest In Real Estate
Ask yourself why do you want to invest in real estate.
Ok, then read this: “Why Do I want to invest in Real Estate?”
Answer: Because I want passive income and investments.
Then ask: “Why do I want Passive Income and Investments?”
Answer: “So I have the freedom to live the life I choose!”
Lastly: “What Life would I choose if I could?”
Answer: (This is where you come up with your own answer)
Does your 3rd answer line up with question number 1? Then great! You should start investing in Real Estate ASAP!
Does your 3rd answer describe something else that has nothing to do with Real Estate investing?
Well then maybe real estate isn’t for you? I am learning that it isn’t for everyone. But that’s ok, because only 64%-68% of the American adult population historically owns real estate, and that includes the real estate boom of 2006.
Maybe what you really want is to travel the world. There are other ways to generate income that will allow for this. Maybe you can intern at an embassy in a country you want to spend time in? Don’t need to own real estate for that.
For me, real estate made a lot of sense, and still does. But we are also not in the same market we were before. This is why I also diversify into stocks and other small business opportunities.
If you plan on spending more than a couple of years in any one place, I highly recommend buying a home and renting the rooms out. If you have a family and this isn’t conceivable then I recommend buying a home and in a few years moving to another one and keeping your first as a rental.
If you can do this every 3 years imagine the position you will be in after a short decade. The time is going to pass by anyway!
Make these types of decisions as early as possible.
Or don’t. Just keep doing what you are doing and keep getting what you have been getting.
What do you think? Love this? Hate this? Let me know!