Having A Pile of Money Does Not Make Someone A Real Estate Investor

Not sure if you have noticed it or not, but the number of real estate investors are increasing rapidly. There are three new investors in my area. But this incident of increasing real estate investors in my area made me think.

The 3 guys I’m talking about are 2 lawyers and a local mall owner. And as I’ve said, they are new in the industry. They just bought a few properties beside our area over the last couple of months. But I keep asking myself, why? Why did they need to start a real estate investmentcareer?

The very first thought that crossed my mind was the economy of ours. Maybe they had saved from their profit and income over the years and instead of putting it into a bank account, they thought why not dig into the real estate industry. They understand well enough that the economy of ours won’t do them much good for them if they couldn’t figure out a way to get a constant cash flow.

If this was not the case, then they entered the real estate industry for the same reason as mine, profit. I can’t blame them for this either. It all seems very easy. You buy a property, and you sell it for more. The difference between the amount you bought the property with and the price you sold it for is your profit. Simple, right?

Wrong. If it was as simple as this, there wouldn’t be any drop-outs from this industry. And the biggest reason for this kind of drop-out is they think that having a pile of money makes you a strong candidate to become a real estate investor.

The lawyers and shopping mall owner who recently become real estate investors may have thought something like this. They may have thought “I have enough money. Now I can buy property and sell it at a higher price. This is how I’m going to build my empire.”

I hope I’m wrong. But if they really thought something like this, they are in danger. If this was the case, then I’m sure they didn’t have someone to talk to them and introduce them to the reality of the real estate industry.

Actually, it’s not only about the money. Even if you have a room filled with grands, there’s no guarantee that you’ll earn a single penny with those by investing in real estate, unless you proceed with a plan.

This is the problem with new investors. They only think like this“if we could spend money, we will make money.”

This strategy might work in other business sectors, but in real estates, this is not the mantra.

In real estate, you need to follow the market, and see the recent deals that have been made in the neighborhood. Also, you need to have an eagle-like eye to spot a good property. If you can’t do that, a pile of hard earned money won’t be of any use.

For more info, please visit: Charles K Carillo

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