We've all heard it..."no other industry has created more millionaires than real estate." It's what got me excited about investing in real estate and probably you too. There's also probably no other industry that claims you can do it over night as much as the real estate industry. Although it's tempting to chase the "get-rich-quick" idea, if you really think about it, how many people do you really know that got rich quick? (I'm not talking about someone you read in the paper either.)
How often in the media do we hear about the 50 year old guy (or gal) who slowly built up his business or his net worth over 20 years and became a millionaire? Doesn't make for very exciting news, does it? Rather we hear about the overnight successes. I can't tell you how many times over this real estate boom I've heard of someone buying a spec home for $200k believing it will be worth $300k next year.
Sure, I've read the stories. I know some people made some quick money but for every one person that made money spec investing in the recent boom, there are probably 20 spec investors that lost their shirts. Due to all the spec building in places like Florida and Arizona, there are city blocks of vacant inventory, most of which are now foreclosures. You want to get rich quick...start manufacturing "For Sale" signs.
I'm stunned when I talk to an investor who got fried who says they're done investing in real estate claiming it doesn't work. The truth is we have to get back to the good old fashion real estate investing basics. Buy at a good value and hold. The numbers have to make sense and add up. Buy for cash flow now and appreciation later. That is smart investing.
Ask your parents or grandparents what they paid for their house and you will hear stories of purchasing their homes for $5k to $55k. I'm willing to bet that same old house is worth a lot more today than it was when they purchased it. Think about if you were to buy today for the prices we're selling at Bulk Foreclosure Deals and you were to hang onto those properties long-term. Think of the legacy you could pass down for generations to come. I think most of us struggled financially when we were young adults just getting started. I know my wife and I did. How would it feel to be able to pass on a property (bought and paid for) to your child or a grandchild that is cash flowing $2k a month? I plan to leave my posterity an empire!
All successful investors (and people) learn how to turn challenges into opportunities. Those of us who have the foresight to buy and hold now in today's slow real estate market, may not be in the newspaper headlines but what's wrong with being a boring old millionaire anyway.