Real Estate: Why The Poor Don’t Get Ahead!

I talk to a lot of people who see the wealthy investing in real estate and making money. They want to explore the world of wealth and dive head first into their real estate fortunes. There are How-To-Get-Rich-in-Real Estate classes offered in every town across America and now online with webinar classes.

So, with all this information out there and people who truly desire to do the work, why are so few succeeding?

Quick story. I spent last weekend with a friend of mine who has gone through some real estate training. He has his first rental property on a lease to own that went south after a year. When the people moved out, the place was a wreck and needed some work, so I loaded up my tools and went to help so he could get it back on the market in a quick time.

Here are a couple of the things I learned from his experience and others I’ve watched invest in real estate…

1. No Cash Reserves…

Too many of the classes teach that you can get into the investment with no money down or using other people’s money. Great. What happens when the deal turns south and you have no money to keep it going? Something major breaks or the tenant buyer stops making payments. When those things happen, and they will, it is important to have a reserve set aside to weather the storm.

2. Bought at too high a price…

The old adage that buying low and selling high is important to remember. Buying investment real estate is not about just buying the property. It is extremely important to Buy Right. One of my mentors teaches that you make your money on the Buy otherwise it’s simply speculation and very few win at that game.

3. Don’t understand the value of labor…

While we were doing the ‘hard manual labor’ on my friend’s house I saw a problem. WE were doing the labor. Although we could easily do the work, it took the entire weekend when we could have been doing something else. A professional could have done it in half the time and done a better job at that. For all we know the work we did will cause problems down the road if we didn’t do it right. The wealthy understand that labor is not a point of saving money.

So remember, there are upsides to investing in Real Estate, but don’t do it like the poor. Take the time to learn the right way to invest and be wise about your investment. If you want to make money in Real Estate, stop acting poor when you invest.