The Deceptive Lure to Invest in Real Estate
Two worlds collide in the profession of real estate investing.
Our modern age has replaced caves in the forest with comfortable homes of brick and mortar, and the casual hunt with bow and arrow has been replaced for an 8-hour grind at the office to put bread on the table. But by advancing to a more convenient lifestyle, we inherited the task of menial and boring work in return for energy spent.
Nic Nickerson, Al Lowrey and Mark Haroldsen did not intentionally target these dissatisfied bread-winners, but the books they wrote about investing in real estate in the '70s sparked a new flame of hope for Easy Money. The promise of millions of dollars in profits from owning real estate triggered an avalanche of investors who began to recognize that buying, renting, renovating and selling homes was much better return on investment than the 8-hour grind at the office. These books spawned the seminars, Boot Camps and Investing Conventions of the real estate investing profession.
The problem was, and is, that many foot soldiers in this growing army of investors expect to "get something for nothing." The appeal of staggering checks at the closing table instead of a few bucks in weekly wages has often blinded the staggering numbers of new investors.
So, two worlds collide: real estate investing as a profession and the lure of the Big Bucks.
Education and experience are the first requirements of expert investing. But who enjoys the drudgery in gaining a solid education? And, renting and renovating are not a leisurely stroll in the park, but are tough jobs that demand intensely hard work. Why not try to get by with a sloppy job? Even the creative tasks requiring mind-work, like selling properties and processing short sales, are exhausting if executed correctly. Taking short cuts and ignoring the personal needs of customers can be easily excused in pursuit of the Quick Buck.
My analysis after over 30 years of investing is that we must strive with greater rigor to become professional. I started my journey after a catastrophic business failure that left me with nothing but a deep desire to succeed. I became a millionaire in two years only by struggling to buy property without cash or credit. I was awarded national "Top Investor of the Year," but no one knew the difficulty and sacrifice. Those who promote the real estate investing profession proudly wave the "Big Buck – Easy Money" banner, but do not be deceived by the façade.
It is true: there's big money in real estate to reward the professional. But do not overlook the cause-effect relationship. Success only comes with education, experience and "blood, sweat, toil and (even some) tears."