Start Building Wealth By Mistake
Working in Real Estate, specializing in working with investors, I help people create and grow their wealth. Just today, I was speaking to a new investor that had just purchased his first single family income property, and was very excited, admittedly probably too excited.
When we first started digging into the numbers, it seemed apparent that he would end up making about $150-$200/month after paying the mortgage (Step 1), but I had to bring him back down to earth when talking about the other expenses that would be involved (i.e. repairs, maintenance, property management fees, etc.). Not to mention, if the tenant wasn’t up to par! What if they came in and tore up the place, only to leave you high and dry with a rental that needed to be fixed up just to rent out again?
Once adding in these expenses, he quickly realized that this may not have been the best investment to start with, and his Realtor was not as well versed in this topic as another Realtor might be. The magic came when he realized that he was able to find someone who did have the experience and could guide him to finding the right investment for him (Not saying I’m right all the time!).
His current investment might not be a gold mine, but with a little elbow grease and luck, he would be able to get a tenant in the property that would help him pay down the mortgage, thus creating equity, and would only be set back on the path to his real estate empire about 6 months! Once pressed even further to determine what his true real estate goals were, he was able to settle on the fact that he would like to own multi-family residential real estate (i.e. 2-4 unit apartment buildings). We then formulated a plan on how to achieve that goal within the next 6 months, and went on our way.
My goal in writing this is not to say that you should come work with me because I am a great Realtor. My goal in writing this was to show people who are hesitant to take the first step into investing, that you can achieve your goals even if there is a small set back (and there almost always is). I have never met an investor who doesn’t have a dozen horror stories to tell, but it always amazes me that their story always ends up the same.
Persistence – If you make a mistake, try and try again.
Patience – Just because you want it now, doesn’t mean it will happen now.
Education – Learn from your mistakes (AND those around you).
And finally, I would add, build a team.
I think this article is a great example of how having the right team behind you can make a big difference in your success, and timeline to success. If I had met this investor a few weeks earlier, he may have decided not to go with this property, and we may have been able to find him something that was more in line with his investment objectives, with a better return.
But at least he got started, and often times that is half the battle right there!
Until next time,
— SanjeevAdvani — Real Estate Agent, Investor, and Property Manager