Investing Basic

10 Real Estate Investing Myths

Real estate investing is only for the rich and wealthy. Buying real estate with no money down is not possible. You need to know insiders to invest in real estate.

Are the above facts or myths? Let’s explore the 10 myths needed-to-be-busted in real estate investing:

1. Real estate investing is for the rich

Money is a great help, but my first property was a $3,500 lot, which I sold 2 weeks later for a profit. Small deals, partnership, low-down deals or just saving $7 a day for a couple of years until you have the right amount of money as down payment are some ideas that are ideally not of the riches – There are certainly ways for the rest of us to start real estate investing with a little amount of money in our pocket.

2. “Zero down” is impossible

I once sold a rental property only for $1000 down payment. Why? Because I trusted the buyer. I also wanted the 9 percent interest and higher property price. You could also get a cash advance on a credit card for an extra $30 a month and made it a zero-down deal. Yeah – it exists and it happens.

3. “Zero down” is the best way to go

Not always. If you don’t invest some amount of money, you will end up paying more for the property. You will also need to invest more time to find the right properties with zero down offers. Yes, the zero-down deals are out there, but finding them are not always worth doing.

4. You need experience

Experience is obviously helpful, but you do gain experience by getting your hands dirty. You need to start somehow – with common sense, of course. Ask yourself: can I afford to lose this amount of money? Am I willing to learn to read the numbers related to real estate?

5. Some real estate investors has “Midas’ touches”

You could said that, but the real truth is some took the time and risk very seriously to learn about how the market works and they learn continuously.

6. Knowing the “right” people is essential

You probably won’t get into the ‘inner circle’, but the right people (next door) at the right time can help you access “secrets” or “insider info” – Talk you your real estate agents, investors, partners, etc. and they can point you to the right information (or at least, to the right people who can give you answer.)

7. You need to be a great negotiator

Your negotiation skills help, but if you learn to crunch the numbers and translate the market – and make real estate offers based on them, you can do okay regardless of your negotiation skills.

8. Related to #6 – You need “insider info”

Not necessarily – take one real estate deal at a time, and you will gain experience along the way – your experience is the best ‘insider’ info you can have.

9. “Fix and flips” are safe

Wrong. Deals done wrong have failed many, even experienced real estate investors. Small deals gone wrong only cost you a small amount of money; big ones leak you a large amount of money.

10. Below-market-value offers are the keys

You have the numbers and you need them to work – in the process, you need a plan. You can offer above the market price and still make money from your real estate investment using creative ways to finance your purchases. Again, the key is your ability to crunch the numbers and read the market like a book.

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