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Real Estate Investing - Ten Myths

By - 2010

Is it true real estate investing is only for the wealthy? Can you buy with 0 down? Do you need to know the "right" people? Let's take a look at some of the myths of real estate.

1. Real estate is for the wealthy. Of course money helps, but my first real estate investment was a $3,500 lot - which I sold for a profit two weeks after I bought it. Small deals, using partners, low-down deals, or just putting aside $8 per day for a couple years until you have enough money for a down payment - these are some of the ways to start with a little and invest in real estate.

2. "0 down" is near impossible. I sold a rental property for $1,000 down. I trusted the buyer, and I wanted the 9% interest and higher price. He could have gotten a credit card cash-advance for another $30 per month and made it a "0-down" deal. "No money down" simply means none of YOUR money down, and yes, it happens.

3. "0 down" is the best way to buy. Don't invest your own money, and you'll have higher payments, spend more time finding suitable properties, and pay more for them (generally cooperative sellers want more for their cooperation - I do). Zero-down deals are out there - they just aren't always worth doing.

3. Experience is required. You get experience by investing. Use common sense, ask how you can lose money, be willing to learn the numbers, and you can start where you are.

4. Certain investors have a "knack" for making money. Sort of, or some just took the time and risk to learn the market and continue their education.

5. You have to know the "right" people. It helps, so start the process by talking to investors, real estate agents, landlords, etc.

6. You need to be great negotiator. Run the numbers and make the offers based on them, and you can be the worst negotiator and still do okay.

8. You need "insider knowledge." You're on your way as soon as you understand one deal. Read and read some more, but the best "insider" knowledge comes from experience.

9. Fixer-uppers are safer investments. People have the idea that doing work themselves is the safest way to assure a profit, but poorly planned "fix and flips" have bankrupted even experienced investors. Most poorly purchased rental properties will only eat a little money every month, not bankrupt you.

10. It's best to make "lowball" offers. It's best to make sure the numbers work, and to have a plan. You can offer MORE than market value and make money investing in real estate, if you understand creative financing - and how to do the math.

Real estate myths are a mix of half-truth and misunderstanding. They are often pulled out to excuse mistakes due to a lack of research, or worse, to excuse never getting started. Real estate is still a great investment - just learn what you need to know.

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Houses Under Fifty Thousand | Real Estate Investing - Ten Myths