There is no such thing as staying the same; you are either striving to succeed or allowing yourself to fail. Real Estate investing is centered around one primary goal...the generation of short and/or long term capital gains. The failure or success of your investing efforts will depend on several factors. Some factors are beyond your control, so your focus should be on those factors you can control. A few controllable factors include education, acting on opportunities, taking advantage of timing, keeping fear under control, and preparing for worst case scenarios.
I know a lot of people who are interested in buying property, but they just can't seem to pull the trigger to make things happen. The greatest losses of all are those from missed opportunities. Unfortunately, potential investors let fear dictate their financial decisions and missed opportunities become the norm rather than the exception. Procrastination is deadly to investing because of the importance of "timing". If you don't act on opportunities that are in your best financial interest, then you will fail to reap the rewards that investing brings.
You've heard the saying, "Misery loves company". If you surround yourself with people who are financially ignorant, you can't expect their support when your ready to make a change to improve your financial picture. They just won't understand that the end (wealth) justifies the means (investing in real estate). It's important to surround yourself with financial optimists that use objective data and not emotion to invest. It is also important that they have a track record of successful investing in up and down markets. Mentors in the game of investing are extremely valuable and their knowledge and experience can help you avoid mistakes they may have made in their past.
The ultimate decision to financially succeed or fail is on you. Get off your butt and take advantage of this depressed real estate market. Stuffing your mattress with money won't make you rich, and yields on bank savings accounts are a financial JOKE! Mortgage interest rates are about to go through the roof. If you miss this buying opportunity, you may never again have the opportunity to have the combination of low interest rates and cheap housing all in one cycle.
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6 comments:
abundance is a great goal...and abundance in all areas of life makes it complete. Stay motivated...it helps others!
Thanks for the comment Rick. Motivation can be contagious.
I just read all your blogs for the past year and am very impressed with your information. I've recently read Rich Dad Poor Dad and enjoy your writing more.
My question for you is, "My husband and I are itching to buy an investment property but are current debt is holding us back. (We purchased a new home last summer.) I know we are missing a great opportunity with prices and interest rates so low. One of the added concerns in our market (New England) is the cost of heating oil. Multi family properties are dropping dramatically because, I think, landlords are concerned with the upcoming heating expenses. So again, a great opportunity, but how would you suggest we take advantage of it? (I guess I'm concerned about multi-family investing based on one of your blogs vs. SFR. We cannot get financing for another SFR at this time.)
Thank you in advance.
Michelle
Michelle, thank you so much for your kind words and congratulations on the purchase of your new home. You are absolutely right in your assessment that the current market presents an extraordinary investment opportunity.
You mentioned that you are unable to secure financing for another SFR. Will your lender finance the multi-unit property you're interested in?
We are not pre-approved yet for a multi-family because our lender said to first find something so she can get more specific numbers. It will definitely have to be a 90% mortgage because we have a lot of debt right now that we are trying to cut down (i.e. car leases, nanny expenses). I still feel like it makes good sense to finance a multi-family that covers its expenses even if there is limited profit because the market is so favorable. Our lender mentioned the financing is more strict now but because of our good credit, we should be able to finance something with good rental income. We have a potential opportunity to help my mother-in-law purchase a multi-family where she would obtain the financing and live there and we would take the risk of maintenance and keeping it rented. We're not sure how to outline the deal so we both benefit though. It definitely would be a good move for her because she has rented all her life.
Michelle, it sounds like you're pretty set on acquiring a multi-family property. It also sounds like your mother-in-law is in a position to get financing. It would be in your best interest to be on title with your mother-in-law rather than counting on verbal agreements that put you at risk. You've heard the saying, "don't mix family and friends with business", and for good reason. Everything should be in writing to avoid any ambiguity in the arrangement.
In my April 26, 2008 post, "Investing with a partner can be a smart move", I outline many of the benefits of this kind of arrangement. If you have a solid relationship with your mother-in-law, it just might work in lieu of the family tie. Cutting your expenses in half by being a 50% owner should make financing easier to obtain not to mention the lower loan amount.
Keep me informed on your quest to invest. I, as well as my readers, would love to see how you progress.
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