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Top 6 Misconceptions About Real Estate Investing

By: Elite Legacy Education, April 17, 2017

Top 6 Misconceptions About Real Estate Investing


You can’t believe everything you hear and this goes for real estate investing too. Having been around for quite some time now, this is a popular topic in particular. Many very successful people have gotten their start in business through real estate. However, everyone has their own opinions about what does and doesn’t work, as well as what’s required from an investor. With that, we wanted to clear up some common misconceptions about investing in real estate.


  1. Lots of upfront investment capital is required. Although it never hurts to have some capital set aside for investment, there are also situations where minimal amounts are required. Typically, there is a tradeoff when less capital investment is required. In these cases, you will need to dedicate more time to the process and become more creative with how you spend your waking hours. This creativity can flourish in the form of marketing or the way in which you structure a deal for example.


  1. Networking is unnecessary. If you think that networking only applies to real estate agents, then you’re wrong. It is extremely important for real estate investors as well. You can make your life much simpler by building and maintaining a strong network. It never hurts to have a source of potential buyers and sellers in your network or at least know people with access to these groups. The heart of the matter is that networking is beneficial to the bottom line of your business.


  1. It’s an easy “get rich quick” scheme. Real estate investing is like any other business endeavor that requires hard work and perseverance. There is nothing easy about finding your first deal, as it will require some sweat equity and many hours scouring the market for the right deal. If you encounter an opportunity posing to be a “get rich quick scheme” then it should be an immediate warning flag. You will surely want to do some further research as the potential for a higher return is often accompanied by greater risk.


  1. You must have a stable job and solid credit history. Again, this is not true for all the different cases of real estate investing. There are some types of deals that do not depend on your personal credit to obtain financing. This also means that you do not necessarily need a stable job that would otherwise be required to obtain a conventional bank loan. Alternative methods of securing financing and structuring real estate deals do in fact exist. Be sure to consider all of your options before ruling any out.


  1. You must be a qualified landlord. This may come as a relief for some, or many of you. We all know that being a landlord can be a lot of work. And if you didn’t know that, at least you do now. That said, there are many different types of investment options that are either direct or indirect in nature. For example, you can choose to invest in a REIT. This is just one example of an investment where you do not interact directly with the property and its tenants. However, if you like the idea of direct investment in deals like rental properties, you can always choose to hire a property management company. In this case, they will do all of the hands-on work required in the upkeep of your property and management of tenants.


  1. The best place to start is wholesaling. This is just one type of real estate investment option that has become popular as of late. These are generally advertised as real estate deals that require no cash down on your end. However, it may not be the right approach for youeven if you are a beginner. Deciding on the best place to start requires the consideration of your personal situation. For example, what other commitments do you have? Do you have a job? Are you looking to be a landlord or would you prefer a hands-off approach to real estate investing? All of these considerations can play a role in determining the best type of real estate deal for you to engage in. Again, consider all of the options available to you before ruling any out.


Hopefully this helps to clear up any confusion you may have had about investing in real estate. Remember, you should always explore both sides to someone’s claim, as there are tons of differing opinions regarding the art of real estate.


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