Let’s face it, there’s tons of real estate investing information out there. But of all the people you’ve seen at seminars lapping up the words of wisdom from the real estate gurus, or the people you see at Barnes and Noble skulking around til 11 PM reading all the real estate investing books they can get their hands on (A charge of which I am guilty!), how many do you think actually succeed in their real estate investing businesses?
I don’t have exact figures, but based on my experience as a real estate investing information provider and coach, I would guess it’s close to only 1-2% of people who want to be real estate investors get into the business and stay in the business and make it profitable.
Those figures are so disappointing.
Why is it so hard? Why do so many would-be investors fail before they begin? And why do others, who are able to take the first steps of their real estate investing career successfully, still fail to meet their goals long-term?
I realized the deck was stacked against me as I begin as a real estate investing student at a seminar a few years ago. I bought all the real estate investing courses, signed up for private coaching, and watched as many of the people around me fell by the wayside. There were many times I wanted to quit, myself. You probably have your own story of struggle in your real estate investing career.
It’s the million dollar question. Here are the conclusions I’ve been able to come up with. modular homes denver
Why Do Real Estate Investors Fail In Spite of Great Real Estate Investing Information?
1) The Myth of Get Rich Quick – Why do would-be real estate investors fail?
Just because there are real estate investment strategies, such as flipping homes, that can be implemented quickly (60-90 days), that doesn’t mean that it is easy to find deals, negotiate them and close them in the first month or two after you start your real estate investing career. In my experience, most people need to take a little time to become familiar with the real estate markets in their area, real estate terminology and strategies, and then get started implementing so they can practice finding and negotiating with motivated sellers.
Even with a good deal closed, you might only walk away with $5,000 or so from a flip. With a subject to or lease option deal, the property may take years to “ripen” in your portfolio before you are able to sell it for a significant profit. The biggest money I’ve seen people make quickly is coming from rehabs and short sale negotiations. Pursuing these types of deals can verge onto a full time job. They do work, and work quickly, but they take a lot of time to implement.
2) The Myth of No Money Down
So many times, I have heard students come on coaching calls with me and say, “I just lost my job, so I am really motivated to make this work quickly.” or “My goal is to flip one house a month every month because I need some cash for start up capital.” These sentiments are probably being perpetuated by the gurus out there who encourage people to think that real estate investing is a no-capital-required business. Even after you get the formula down, it can take years before a paper-profit becomes cash-in-hand if you own rental property or do lease/options.