Welcome to Week 9 – in which we ask the critical question: Does Investing in Real Estate Make Sense for You?
If you are already investing in real estate, this first segment may not apply to you.
If you’re new, or interested in ways to supplement your income over time, diversify your investment portfolio, and potentially enjoy some tax benefits, real estate can be pretty amazing. But just know – this is the exact opposite of a get rich quick scheme.
Real estate is not a liquid investment. Real estate requires time to reach its full potential. And some investments simply don’t work out. Are you prepared to absorb a loss, or even months of negative cash flow? Can you handle the emotional ups and downs of an imperfect property, transaction, or tenant? If you can’t weather a few storms, this may not be for you.
Chris describes two main types of Real Estate Investor: Hands On and Hands Off – Which one Are You?
Do you prefer to be involved with the maintenance and upkeep of your properties? Hands On clients often see themselves as full time investors, or their primary business is construction. They bring a team, or expertise, to the table. And they save money when they rehab a new purchase or upgrade between tenants themselves.
They are ‘Hands On’ in the very best way. As Chris experienced first-hand, it’s easy to lose a significant amount of money on repairs and rehabs. (Part 5 of the book digs deeper into Where Investors Get Hurt and Why.)
However, most of our clients aren’t hands on. The majority of our investors have a full time job – as accountants, doctors, lawyers, corporate executives or business owners, and they want us to fully manage their investment for them. They made their money elsewhere, and are looking to earn more in a manner that does not require additional time or personal effort. They are using their own money—or their banker’s money—to make more money, and as investors, they trust us a great deal.
And then there is the Accidental Landlord. When someone inherits a home, or buys a new home, they find themselves suddenly managing a rental property! Most did not set out to be a landlord, and they almost always rush to the ‘Hands Off’ investor.
What kind of investor are you? Are you hands on, using your team or your skills to cut construction costs on rehabs and updates? Or would you prefer to focus on other things, staying hands-off while a team of professionals take care of your portfolio entirely? Tell us which describes you in the comments!
Join us next week, and I’ll reveal the traits of Chris’s most and least successful clients.
For a free copy of the full book, A Real Estate Investor’s Guide to Profitability, email FreeBook@ROOSTRealEstateCo.com and we will send you one. Or download a free e-book version here: MakeRealEstateWork.com/free-book