You need a Income Buffer, Passive Income, or Nest Egg

What often kills new real estate practitioners is the concept of lag time. When you sell a house, you typically don't get paid when the contract is accepted. The average contract is written for 45 days. In a perfect world, you would get your commission check 45 days from the date it was accepted. In the real world, you don't always get paid on time. What could go wrong? Maybe someone forgets to order the title, water certification, village inspection, pay-off letter, survey, termite inspection, or income verification. If you're in a hot market, the title company could be backed up for two weeks or longer. The closing date could be pushed back days or even weeks. A successful real estate practitioner needs a line of credit and a financial cushion of three to six months of personal expenses to survive. You also need passive income - or income coming in from investment property so that you don't have to be desperate to close a deal. When that check finally arrives, don't forget to put some money aside for your nest egg.