Got Cash for Real Estate Investing? As a foreclosure buyers agent I come across tons of investors and want to be investors. Here are some of the things I have learned. There really are no short cuts.
In order to stay in real estate long term, you need cash reserves. Buying real estate nothing down is easy; handling negative cash flow, repairs, and other expenses in the meantime is the trick. In fact, if you can handle the bad times, you will always come out on top.
Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants, and give into tenants' demands for fear of vacancy. When you have a sufficient cash reserve, you act rationally.
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You can hold out for a higher sales price.
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You can hold out for a qualified tenant.
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You can leave properties vacant rather than accepting unqualified tenants.
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You can call a tenant's bluff when they threaten to leave.
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You can take care of necessary repairs and improvements on your properties.
Real Estate Investing is a Business. Its been my experience that people are lured to real estate because of the quick buck it promises. Don't hold your breath--you won't get rich quick. An "overnight sensation" usually takes about five years. More than 90% of the people who take a real estate seminar quit after three months.
Why the high fallout rate?
- Lack of action and unrealistic expectations.
- Investing should be treated with the seriousness of a career.
- It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat real estate like any other business.
- When you first start you are going to do a lot of grunt work and things that you might not like doing.
Hire licensed people for the things that require it but step up to the plate for the unskilled stuff. It will save you money and every business needs to save money. Its called sweat equity not kick back and relax equity!
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