I read a rather discerning blog post the other day concerning Real Estate Investing. The post basically listed 10 ways to fail in Real Estate investing, the concept being to describe 10 ways how to be a successful investor.
For 1 thing, the list was the same cookie-cutter list you will find in any Borders book labelled "How to Make a Million in Real Estate" or any informercial on at 3:00am in the morning. These cookie-cutter concepts are built around purchasing a home for 70% of market value and basically flipping it for a profit with a minimal of expense. I've got 3 issues with people hawking these ideas - 1) These "investors" wouldn't need to sell these books if the concepts really worked and 2) These concepts take advantage of the poor and uneducated home owner. 3) Realtors are held to a higher standard.
I live, work, and invest in Maryland, as does the person how posted the list and I can say with fair certainty that if you are purchasing in Maryland at a 70% discount, somebody is being taken adavantage of merely for a profit and the net benefit to society wiill surely be negative. Our banks do not even sell foreclosures for 80% let alone 70% of market value. Now, i am sure there are extreme cases of homes in complete disrepair, but in most circumstances this is not the case, rather the home owner is "sold" into a deal without being fully informed. To take advantage of someone simply for a small profit is morally wrong. Sure, if your only goal is to make a few small profits, then this can certainly be a successful endeavor, but if your goal is to build a lasting and respected business, this is not the path to take.
Here is a quick example - To purchase a $400,000 home in Maryland for 70% of market value, you would pay $280,000. Now unless the foundation and roof have completely failed, someone is getting a raw deal. A replacement value on a $400,000 home is approx $150,000-$175,000 so you could basically replace the whole house! Obviously the people purchasing the homes have no such intention and simply flip the home back on the market with minimal repairs and aim for a small discount of market value for a tidy profit.
I may be in the minority on this, but rather than waste your money on these worthless books, spend the money on legitimate classes and training material, work hard everyday, build loyalty with your clients and community, and you will experience a much longer and rewarding career.
Comments are welcome, but go easy on me :)
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