Wednesday, January 23, 2008

Real Estate Investing - Fact vs. Fiction

Ever stay up at night and see the guys on T.V. that claim to buy real estate for pennies on the dollar? These guys are some of the best salesmen out there and real estate is not what they are offering. Without ever having to show a single property, they are actually getting people to pay good money for a "system" that will show them the "secrets" of how to buy real estate. While this may be a serious display of good salesmanship, one must ask themselves why they wouldn't buy these unbelievable deals themselves? In reality, it is probably because they are really too good to be true.

There have also been countless books published on ways to buy property under market value and get rich in the real estate business. These products, no matter the form, are not going to help you much with real estate. Somebody once classified a class of buyers known as real estate investors and another class known as "investors." The difference is that "investors" have usually just learned one of the latest real estate buying systems, usually do not own any property, need to get rich quickly, and have expectations that can only be met on a Hollywood movie set. You need to steer away from individuals of this type.

Real estate investors ,on the other hand, understand that investing in property is serious business, can be risky and time consuming, will require them to usually have money already available, is not a miracle pill, and will pay dividends if done in a responsible manner. These are good people to have in your sphere of influence if you are looking to start investing in real estate.

So without diving too far into the details, here are the things you need to know before you buy any investment property.


  • There are no "miracle" deals that will take you from broke to rich very quickly.

  • You will probably already need some money to invest in real estate.

  • Most real estate fortunes were made greater by real estate investment, but were not initiated by real estate investment.

  • Betting that a property's value will go up due to market conditions is risk filled speculation.

  • Valuing property according to its financial condition (i.e. money it generates via rent vs. money it costs via expenses) is the most common form of valuation, and probably the least risky form of real estate investing.

  • Great real estate deals can be made in any market.

  • Borrowers will probably pay a higher interest rate than they did for their home loan.

  • Infomercials and "get rich quick" books do not reveal all the facts and are misleading.

  • Investing in real estate can help you pay less in taxes.

  • Real estate investments can be traded without immediately paying taxes on your gains.

  • A qualified real estate professional can be your greatest ally in finding good property and gaining valuable insight, but you only need one professional if they are properly qualified.


  • Real estate investing will take a person from unemployed to rich in a short period of time.

  • Good real estate deals can only be found at distress sales like foreclosures and bank repossession sales.

  • Its easy to make money investing in real estate for those without any money.

  • Property should only be purchased if it will immediately break even or cash flow positive.

  • Online "foreclosure lists" are the trick to finding good real estate deals.

  • Your home should be viewed as your biggest investment and you should view home shopping as investment research.

  • Telling people you are an investor means you are an investor.

  • It is a good idea to take advice from everybody, regardless of whether or not they own or have owned investment real estate.

  • To find the good deals, you should work with as many real estate agents as you can.

This quick list should give prospective investors a basis for better understanding the principles of real estate investmnet.

People who understand these things and are interested in pursuing the worlds best form of personal investment should contact us to further discuss their needs.