So, you watched a free webinar on real estate investing, or just finished listening to Rich Dad, Poor Dad on audiobook.
And now you’re thinking, “hey... this could work!”
Now, whether you’re looking to supplement your income, or start a side-hustle and turn it into a full-fledged business, there are a lot of ways to make money.
So how do you know if real estate investing in particular, is right for you? After all, there are less risky ventures than buying, flipping, and selling homes.
Ultimately it comes down to you. But there are certain things unique to the industry, that may either be really exciting - or daunting to you, depending on your strengths, time commitment, and goals.
Here are 5 signs that real estate investing is (or isn’t) for you...
If you’re not driven and self-motivated, real estate is not for you.
Look, I don’t need to tell you that nobody is just going to hand you a paycheck week in and week out.
So if you’re not persistent, motivated, and driven, this probably isn’t for you. “If you stop learning you will most likely fail. It takes a want, (and a bit of luck), as I’m finding out,” says Blaine, a licensed agent, investor, and founder of AwesomeWholesalerLLC, “Mainly, if you’re not driven and self-motivated, if you don’t burn with a fire and passion for this stuff, if you don’t eat, sleep, drink, and shower listening to a real estate podcast, then investment may not be for you.”
He’s right. If you don’t drive yourself to get leads, connect with people, get referrals, no one else is going to.
If you’re not persistent and patient, real estate is not for you.
“If you’re a realist, and if you’re patient, you will be able to make real estate investing work...” says Darrell, a Realtor, and Investor at D57 Investments, “if not, find something else... because it’s not for the faint of heart.”
He’s not wrong. Real estate has ups and downs. You lose profit. Flips go south. It’s hard. Leads don’t come easy. It’s competitive. In Darrell’s words, it’s not for the faint of heart.
If you need a steady paycheck, it might not be for you.
This one should be qualified a little. There are some investors out there who are bringing in 5-10x what a normal paycheck would be. And, there are investors who got started on the side, working nights and weekends, while working a full-time job and earning that paycheck, until they could make enough to leave.
So to clarify, quitting your job, and jumping in full time to real estate investing is probably not for you if you need a steady stream of income (and if you have a family, or debt, or any living expenses at all, that’s probably you).
Jared, the founder of The Friendly Homebuyer, says “if the idea of a steady paycheck doesn’t excite you and you love working with people, real estate investing may be for you.”
So here’s another way of saying it: if you aren’t comfortable with earning a “guaranteed” set amount, no matter the ups and downs, then it may not be for you. Because once you work for yourself, and you’re running your own business, if the market changes or sales go down - your paycheck changes.
Now, it’s also important to understand that no job is “guaranteed” (especially with the advance of AI, and tech in general). But the bottom line here is that if you’re someone who just likes to get paid, and not have that fluctuate, investing (or any entrepreneurial venture for that matter) may not be for you.
If you can’t work hard and problem-solve, it’s not for you.
Despite how some of these “gurus” make it sound, real estate investing is not passive, and it’s not easy. If someone could literally just work a few hours every week, and make $10,000/mo, don’t you think everyone would do it? Don’t you think everyone would succeed who tries to start a business?
The reality is that you need to be a good problem-solver and work really hard. Wade Mitchell would know. He’s been working as a Realtor and real estate investor for a decade or so, at Mitchell Property Group. “Every successful investor I know is highly self-motivated. They are very good at figuring things out and making things happen,” he says, “They are also good at ‘pulling the trigger’ on good ideas. They quickly put their plans into action. I also think it is very important to have excellent communication skills. You will need these skills to convince sellers to work with you. The people see fail are the ones who are not willing to roll up their sleeves and put in long hours of work. They give up easily and have a hard time solving problems. They are also not good at communication with others.”
If you don’t love real estate, investing might not be for you.
Now, let us be clear: there are different types of investors out there. Some just want to wholesale, and don’t know a whole lot about homes. Others do it all, from inspecting, making an offer, flipping, and re-selling.
It’s true that you can get into this space without knowing how to gut and flip an entire home yourself. At the same time, if you already come armed with a strong knowledge of homes, that can only help you.
Heath, the owner of Elevated Home Buyers, is the latter. He purchases, fixes, and flips, as a one-man operation, and says “for me, the biggest indicator on whether someone will be successful in real estate investing is if they, in fact, love working on houses. I know many tradesmen who, if given the resources, would be very successful, because its a job they do every day. They also have the knowledge and professional connections to efficiently repair homes. I believe anybody can be in real estate investing if they have the correct outlook. Put aside the “money-making” connotation and be willing to work very hard, learn through your mistakes and give yourself time to grow in the field without lofty expectations.”
In the end, it depends on you.
One important point to take away is that when you separate the inherent risks of real estate investing, it’s not unlike any venture you’d undertake in order to grow your income, or start a business.
So yes, there are some unique risks or difficulties you’re going to face in real estate. But the need to solve problems, persist and endure as long as it takes, work hard and long, and continue learning, is consistent across any industry where you’re seeking to create something.
In the end, it’s up to you. But if you’re new to real estate, and exploring investing in particular, hopefully, these tips from established business owners will help you evaluate.