What did your grandparents teach you about investing in real estate? Likely, they taught you a lot, if you were just listening. I still remember the day my grandmother made her last mortgage payment.

Our grandparents, those who lived through the depression (and their children who learned those lessons from their parents), bought homes so that they could get into a fixed loan and could predict their housing costs for the next 30 years; and so that after 30 years, they'd have no housing payment. Over time, they paid down what they owed, and they had something tangible worth serious cash when they died, something they could leave to their children.

That's why they thought of buying as an investment. It's true - go ask them. If you rent your entire life, you'll never stop having to pay a monthly housing payment, and when you die, your children may have nothing.

Later generations have forgotten to listen to their grandparents. They bought homes, but then expected the homes would double in value in only a few years. They refinanced every year to pay for cars, vacations, and all sorts of luxury items. They never learned to live within their means, and they thought that because they bought a home, it should pay them an annual bonus. Now, those people are learning that maybe their grandparents knew a little something.

Our grandparents still do know quite a bit, after all, one third of the real estate in America is owned free and clear. Those properties are owned by our grandparents. They make no mortgage payment, and their property is worth a small fortune. It's not too late for us to learn from the wisdom that surrounds us. But, you must listen carefully.