In any business undertaking there are beliefs that are taken into account and taken into consideration, if it really has any bearing. A belief may be superstitious or may be a common practice. Superstitions evolve into myths. When unfortunate things happen in a business, rumor-mongers always try to find out what the circumstances were.
So if the same unfortunate thing repeats on several people in the same business, a superstition crops up. For those who can not convince people on the superstition, they make up a scary story and that’s the time it becomes a myth. What are some scary myths on making money investing in real estate?
1. “Time will come when you can not sell a single property holding for a long time that you’ll be forced to sell it at loss”. This becomes true only when the time comes you become lazy and complacent, relying on the notion that business will come right up your door and knocking. People who fail in real estate investments will never tell others that they became lazy and complacent. They’ll make excuses and sad stories about it. Other failures who would hear that story – make their own story – and that’s it! Even before it spreads as a superstition a myth was already created!
2. “Making money in real estate investment is difficult for me because I do not know anything about it”. There are only very few lucky people who made money out of a business they don’t know about. But there are many who succeeded, especially in real estate investments that took pains to study it. They strove to learn the trade. Also, they did not stop learning and researched more on what they can do. In dealing with real estate investments, you can become street-smart by getting into the roots of the need for properties.
3. “There’s too much money involved in real estate investing and I do not have the resources for it”. Let me tell you a short story of a neighbor who hardly had her house finished up. The main reason is, she did not have the money and could not get a decent bank loan. On her own, she approached several hardware stores nearby. She convinced several of them to give her the finishing materials she needed for her house.
The hardware stores gave her some small credit because she was just in the neighborhood and they could see the materials being used for her house. After she was done with the house that became really beautiful, she was able to sell for a hefty figure and immediately paid the hardware stores. From that time on, she made good flipping houses. Buying empty lots and constructing the houses on the same credit terms, she became successful and there was no looking back.
Remember she did not have money and as our neighbor, proof was we could see right through their dining room because it did not have any outer wall. She was just a gutsy and fantastic lady. She was able to let all her five children finish college, now retired and living comfortably abroad.
4. “It is scary to start because I’ll never know what could happen with my first investment and after that”. This myth becomes for real if you just jump in with your eyes closed. Very much contrary to “look-before-you-jump”. That is true on any new undertaking, no doubt about it. The more it becomes scary why you even don’t try to ‘nose around’ on how things go in the real estate business.
You would admit that getting into a new venture is more comfortable when you have someone with you, right? Sometimes there is some trending in real estate investing. It easily spreads out within the circle of those in the real estate business. Have some friends within those circles. Definitely when a good buy comes up, you have some people with you getting into it.
5. “It is better to invest in banks, financial institutions or trade stocks than putting my money in real estate”. There is some irony to this. If you would look into the financial statements of large companies and check on their assets, you will see that a sizable portion is invested in real estate. Why? Real estate investment is the safest and most secure investment. It can not be stolen, manipulated or close down.
Even if you lose the paper deed or title to it, it still is yours. Only improvements like buildings and houses depreciate but not the land. It continually appreciates in time and could give a windfall profit if developments in its vicinity are favorable. So why let banks and financial institutions get your money for some petty interest rate but profit more than double that, investing in real estate?
Myths become a reality when you do not work against it. Learn from experienced real estate investors on how they go around these myths. They have good stories to tell from which you can ask questions. Beware of investors that do not like competition, they might be telling you more myths than what was stated here. Anyway, you should be able to gauge a person talking or telling a story. Eyes of people sometimes tell a different story, if you know what I mean.
By Robert Holiday