What is it about investing in residential real estate that is so exciting to so many people?
I think most people, whether they are interested in real estate or not, would probably agree there is a tremendous amount of energy, enthusiasm, even hype, right now around residential real estate investing.
Whether you’re an aspiring real estate investor, a part-time investor, or already a full-time investor, you’ve no doubt seen or heard about reality television shows that feature real estate investors flipping houses. I am sure you have roamed through the aisles of your local bookstore and seen the expansive real estate section just filled with real estate books, whether you are wanting to invest, fix-and-flip or own rentals.
I am sure you have seen real estate investor magazines, and you may know some friends or family members who are in a real estate investing club. If you are part of a podcast user group, you have probably seen or heard different real estate investment podcasts and websites. I am sure you have heard about the real estate investment weekend seminars, or even the late-night infomercials, or the educational materials that you can buy to learn how to be a real estate investor.
All these things combined are driving the excitement, the energy, the fad, the trend, whatever you want to call it. It’s all out there, and it’s creating a lot of this excitement we are talking about.
You may even personally have spoken to a real estate investor. I’ll pause and admit, I’m guilty of this characteristic that you might have witnessed when you had discussions with that real estate investor, whether he or she is a friend, a family member, a neighbor, or a co-worker. You have seen their eyes glass over with excitement as they talked about their real estate investing endeavors or their real estate investing adventures.
If you are like me, you probably thought, “Gosh, I have never had this type of a discussion with somebody who is so excited about what they do. I can’t recall talking to my local banker who had this type of enthusiasm, or my friend who is the accountant, or my buddy who is a computer programmer, or even my next-door neighbor who is a corporate manager.”
It’s very rare that you see people talk with excitement and enthusiasm about what they do for a living. Real estate investors do. They get excited. They get energized. They get carried away when they talk about it. And that also links back to the shows, books, clubs, podcasts and everything else out there related to the industry.
So, what is it that’s so exciting about real estate investing? And why has it heightened to the level of awareness, enthusiasm and energy that is out there today? I’ll tell you, as a full-time real estate investor and HomeVestors franchisee in Dallas, I do not know that I have the “silver-bullet answer” or the one universal response to this question, but I CAN tell you what excites ME about real estate investing.
And if these same things excite you—and if you are sitting on the sidelines today, evaluating or doing due diligence, or wondering, or educating yourself about real estate investing, and trying to determine if 2016 is the year that you make a real estate investment, or start real estate investing on the side—perhaps that will move you closer to action. Or perhaps it will move you further away from it.
Whatever the case, I hope that by telling you what excites me about real estate investing, that will help you identify whether or not it’s right for you.
No. 1—I like the transactional aspect.
First and foremost, what excites me about real estate investing—and this may not seem like an exciting thing—is the transactional aspect. Every real estate investment I do, whether it’s buying a rental house, or buying a fix-and- flip property, or buying a wholesale property, all of these transactions have a beginning and an end. And that ultimately drives a strong feeling of accomplishment and a strong feeling of progress as you execute these transactional real estate deals. I like that.
It’s very tangible and very definable. And like an athlete, you can celebrate each individual score, or celebrate each individual win, as you begin and end each individual real estate transaction. It’s very definable and the wins are very frequent, and you get that feeling of accomplishment with each and every deal, and that appeals to me.
Also, each transaction is repeatable, meaning you can increase the number that you do and therefore increase your volume and increase your scale. Keep buying and selling more houses. Keep buying and renting more houses. Keep buying and fixing-and-flipping more houses.
You are not a “one-hit wonder.” It doesn’t just happen once, where you celebrate the win and then you put up your helmet and walk away from the game. The beauty of real estate is that you can literally throttle the size and the success of your business by the number of transactions you pursue and how hard you are willing to work to achieve and complete those transactions.
And then finally, with respect to transactional nature of real estate, I like the fact that because each transaction is one in and of itself, with a beginning and an end, and because each one is repeatable, you have this tremendous opportunity for continuous improvement. It never gets old, because with each transaction, every one of them is different. You have a different seller, a different property, a different buyer, and you have differences on everything in between there.
You can approach each transaction as a new learning experience and improve yourself in some aspect. I assure you it will happen. Every one is different, and you will be confronted with something new, which at the same time, by the way, makes it very exciting. It never gets old and you never lack an opportunity to improve yourself.
No. 2—I like the transformational aspect.
Second, I love the transformational aspect of real estate investment. You have a true opportunity as a real estate investor to make a difference—transformationally—in a person’s life. I’m speaking specifically about that seller, especially in the type of investing we do. We are dealing with distressed sellers, whether that distress is financial, or emotional, or whether they have a distressed property. There are all sorts of different types of distress in the real estate investing world. You’ll see it all, and you’ll be challenged by the opportunity it presents. Really, your value is in your ability to solve that problem for that seller and transform his or her life in a very small way, but that also might be very big to them.
You also can make a difference transformationally by changing that property and improving that neighborhood. Nine times out of 10, when you buy a house, you are going to be putting it in a better place than it was. It’s going to get painted, it’s going to get fixed, it’s going to get occupied, the yard is going to get landscaped, and the roof is going to be repaired. Nine times out of 10, you’re going to improve the situation for that house, transform that neighborhood or contribute to the transformation of that neighborhood, and not only please your seller, but please those neighbors who are living around that house.
Another way you make a transformational difference is by providing a home to somebody, whether it’s a tenant who is going to rent the property, or a prospective homeowner who is going to buy it, or someone who is going to invest in it. You are providing a fundamental need to someone, and that’s good-quality, safe, clean housing, regardless of your personal exit strategy on that property.
No. 3—I like the attainability aspect.
Third, I like real estate—and you may like it for this reason, too—because it’s attainable. What I mean by that is more millionaires in the United States of America attribute their wealth to the fact that they invest in real estate than any other asset class. I stress that because I have also heard real estate called the one final frontier where the average American can accumulate great wealth.
It’s attainable, and it’s an opportunity that we all have. You don’t need an advanced degree. You don’t need pre-achieved wealth. You don’t need a massive, sophisticated business network. And you don’t need some unique life circumstance or experience. You just have to have the drive, the desire and the interest to invest in real estate.
Also under this umbrella of attainability, I like the financial reward. It’s achievable. It’s realistic, and from my experience as a full-time investor, I can assure you that it’s significant. You can build a full-time career with a full-time income that, and in many cases, is greater than what you may currently earn. Whether through investing in single-family homes, condominiums, townhouses or some other type of real estate, you can attain a good, solid, sustainable and continuing long-term income. That’s what I like about it—it is not a get-rich-quick scheme by any sense of the word, but it does present an opportunity to build long-term income and more importantly, long-term wealth.
So that’s what excites me about real estate investing. But by way of disclaimer, I will stress that my intent is not to articulate that real estate investing is the “solve all” for everybody. It is NOT for everybody. One size does NOT fit all. It’s not a get-rich-quick or a get-rich-easy type of activity. It would be irresponsible, unrealistic and unprofessional for me to say that.
My intent is not to minimize the risks of real estate investing. My intent is not to glamorize the opportunity. And my intent is not to simplify the complexity. It’s a full-time career, it’s a full-time business, and you should treat it like that in order to get the results you want.
If you like the transactional side of it, the sense of accomplishment, the transformational aspects of it, the opportunity to truly make a difference in your life and in someone else’s, and if you like the opportunity to attain significant income and wealth, then real estate investing may be exactly what you are looking for in 2016.
You can listen to Kevin’s podcast here:
0 Comments