Why you SHOULDN'T invest in Real Estate…



Real Estate Investing isn’t for everyone, and it’s important that we all take a realistic look at not only what makes it a good investment, but also why some people may chose to look elsewhere – enjoy! Add me on Snapchat/Instagram: GPStephan

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One of the biggest reasons I think a lot of people get excited about real estate is that they believe there’s a LOT of money to be made with minimal effort. If you’re not prepared to put in a LOT of work upfront, real estate investing isn’t for you. What most people will see happen is that they’ll invest a substantial amount of time and money buying the right deal, and then once they buy that deal, it’s less exciting than they thought. Real estate investing is often something you set up now, where the benefits and payoff comes years later.

Second, you should NOT invest in real estate if you don’t understand how it work. This isn’t limited to just real estate, this is ANYTHING you invest in…stocks, cryptocurrency, businesses, it DOESN’T MATTER. If you don’t fully understand it, don’t invest in it. Largely, the people who lose money in real estate simply don’t understand values, don’t know what they’re doing, over leverage themselves, and become emotional in the event the market goes down…or get too greedy and hold out when they want to sell.

Third, you should NOT invest in real estate if it’s meant to be a short term play. I’ll be the first to admit, this doesn’t apply to everyone in every circumstance…and people could disagree with me and they wouldn’t be wrong. But chances are, if you’re learning about real estate investing, you should NOT invest in real estate for immediate short term profit. The reality is that we don’t know if you will absolutely be profitable within 1-5 years to a point where it makes sense to sell. A lot can happen in the market in the short term, and if you go in with a short term outlook, there are so many variables with could disrupt your plan. Long term holding can overcome a lot of other obstacles along the way.

Fourth, don’t invest in real estate if you don’t have the TIME to devote to it. It’s NOT a passive investment without a substantial amount of work from the very beginning. If you don’t have the time to dedicate to this, either factor in the cost of a property manager or don’t invest. The last thing you need is to plunk down a significant chunk of money on something that you can’t give the attention it needs to make it worth it. This will be a time intensive process to get it streamlined to the point where you won’t need to spend much time on it..

Finally, don’t invest in real estate if you don’t like real estate. I know this doesn’t apply to most of you, but you’d be surprised that some people JUST DON’T LIKE REAL ESTATE. They don’t like tenants, they don’t like dealing with people, they don’t like the responsibility, they don’t want to be be tied down to a location …instead, they’d rather make money from a laptop on the beach without having to deal with anyone. And there’s nothing wrong with that, but it should go without saying – you should only invest in real estate if you actually have an interest in real estate. There are a lot of nuances when it comes to looking at properties, areas, architecture, styles, and trends that if you just aren’t interested in it, you won’t give it the attention it really needs to be profitable. Things will fall through the cracks, they don’t be done as well as they could be, and that means less money in your pocket.

For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com

Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq

Favorite Credit Cards:
Chase Sapphire Reserve – https://goo.gl/sT68EC
American Express Platinum – https://goo.gl/C9n4e3

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35 thoughts on “Why you SHOULDN'T invest in Real Estate…”

  1. 2006…jumped on a foreclosure and purchased for 45k. Couldve flipped but opted to keep and rent out. The house has paid back the investment and more 3xs over between rental income and value increase…but ive known I purchased it below value in the last bubble bust so i wont lose in the value at all.

    BUT, at the moment im a lil skiddish on real estate purchases because ots way overvalued, its best to wait till the market gets hit (maybe next year or two), and then buy cash. The issue is the devaluation of the U.S. dollar and the possibilities of crap hitting the fan U.S. currency wise…

    https://youtu.be/DoOsoJWnV2I

    Just food for thought.

  2. The reasons for why people like and don’t like real estate investing were very helpful. I fit in except for being iffy about being tied to the properties

    Thanks for the encouragement. I’m getting my real estate license and going to do real estate after graduating college for Philosophy. Some people have been encouraging and some haven’t. I don’t really know what real estate is like, so I really appreciate your videos and this encouragement about what people like and don’t like about real estate.

  3. How long did it take you practicing these hand movements in the mirror to get to the point where you just did the same 4 movements repeatedly no matter what you were saying? Just asking for a friend!

  4. I'd say, given the current climate economically and the fact that we are definitely on the verge of a total economic collapse, investing in anything where you will have to pay a mortgage 30 years is a bad move. You will never pay it off and the bank will take your properties when the economy finally goes full tail spin. You will lose your investment and yet be in debt so deep you'll never get out. NOW is not the time to make those sorts of financial commitments unless you have the capital now, without a 30 year loan to buy the properties outright…or there is a clause in the contract for insurance that will pay off the debt in full should you default for any reason, leaving your credit in tact at the end of the day.

  5. I feel like if you were to talk about opening up a generic small business like Amway or creating your own clothing line, or a software company, most ppl would shy away because they will say it’s risky and too much work, but with real estate, their minds change, even though this is still a small business like any other and still has a lot of work and a lot of risk. Go figure.

  6. I grew up in a house. It was nice, but my family had to sacrifice so much time and money towards maintenance and expenses. My father always said real estate was good, yet he was always lower middle class. While my family distracted themselves from financial fears with an active social life, numbers guy me could not. My father always said raising a family is worth it, yet his reasoning of having someone else was quickly outweighed in my mind by the financial and time sacrifices combined with all the gross responsibilities and interruptions caused by OTHER PEOPLE. At least when I make a mistake I can take responsibility more easily. Therefore, I am NEVER getting married or having kids cuz I'd much rather be financially secure. You're right about one key thing. If you don't have the right mentality/know what you're getting into through years of research don't buy real estate. Real estate goes far beyond numbers and requires more effort than diversified dividend paying stock. That's why I'm not passionate about real estate. I'm passionate about gambling. Blackjack card counting is far more attractive to me than real estate. With blackjack you can KNOW through computer software your accuracy, advantage, and perfect it with months of practice. Casinos can't force you to not have the advantage: they can only refuse service, and today there are hundreds of casinos to target.

  7. Can you make an in depth video on what factors to look out for before buying a property and what exactly we should be researching and also the websites that you go to for that research

  8. Hey Graham, if I wanted to talk with you about paying you as a consultant but dont have a Facebook how would I go about doing that? What the best alternative way to get ahold of you for that purpose. I worked in the law enforcement field for quite some time and just never felt comfortable getting one.

  9. I plan on doing a house hack with a duplex when I'm financially ready. I need my cash reserves up. Credit is already good. Just don't have a long credit history because of using cash for most purchases. I live in Ohio where prices are much lower than California.

  10. You got me again Graham! I liked another video just because you asked. All in all it's a cheap price to pay for some good encouragement. As a pastor I encourage people every week, but you… several times a week. well done sir.

  11. American Jobs Creation Act of 2004 (Section 840) introduced a new requirement (now IRC Section 121(d)) that stipulates the capital gains exclusion on a primary residence that was previously part of a 1031 exchange is only available if the property has been held for 5 years since the exchange.

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