Real estate investing can be a highly profitable, empowering, and life-changing endeavor. However, if you want to be effective, you must approach it with the right attitude. Over the last few years, we've worked with hundreds of investors.
Many of them
haven't gotten the results they wanted, whether on their own or through other
Real Estate programs. We always see that their overall approach to Real Estate
Investing needs to be updated as we sit down and study their Investment History.
Far too often, we discover that these people regard real estate investing as a
game of chance or a gamble.
Real estate
investing, in fact, can be as safe and predictable as launching a world-class franchise.
The trick is to keep your attention on the right stuff.
A few questions
to ask yourself to decide whether you're looking at Real
Estate Investor Network Los Angeles or Real Estate as a gambling enterprise or an investment
company are outlined below.
Do you
prioritize cash flow over appreciation?
The acronym
CATP stands for
C: Cash Flow
A: Appreciation
T: Tax
Benefits and
P: Principal
Pay Down, and it
describes four distinct benefits of real estate.
Cash Flow and
Tax Benefits have the most stable returns. Principal paydown is riskier, but it
provides some protection to an investor. Appreciation is the part that is least
stable and most risky (i.e. volatile). Appreciation can help you make a lot of
money, but it can also kill you if you time the market incorrectly.
Appreciation alone can be a risky way to make money in real estate investing.
Do you think
and speak as if you're a gambler?
“Bet,” “house
money,” and “chance” are all words used by gamblers. Have you ever said to
yourself, "I'll place a small bet on the very cheap house and see what
happens?" Or did you use leverage in such a way that when you refinance
and cash out, you're thinking about "house money"? If that's the case,
you may be applying the wrong mentality to real estate investing – the
gambler's mindset.
Some aspects of
real estate investing are much riskier than a night on the town in Vegas. After
all, you have the potential to lose more than you wager. You'll lose more money
than you put in if you have to foreclose on a house or pay back taxes, among
other things. Since real estate is not a fixed input/output device, this is the
case. There are a plethora of things that can go wrong in a Real Estate
Investment.
Unlike those
casinos, though, you can use the "rules" to help you win more often
than you lose. Remember that you have a lot of control over how well your
investment performs, particularly if you concentrate on the Cash Flow benefits
of a property.
If you can't
change the demand or the available team (except in extremely rare cases), you
can change the rehab standard, tenant selection requirements, and rent.
As long as you
view real estate with the right mentality – as an investor – it has been and
will continue to be the best wealth builder possible. You'll make better
choices and get better outcomes if you stop thinking like a gambler and start
thinking like an investor.
For Latest
Update in real estate sector, do follow Lloyd Segal.
Comments
Post a Comment