Purposeful Real Estate Investing Versus Chasing the Shiny Object
Purposeful real estate investing is about not chasing the shiny object (your own little piece of gold). You can stop chasing those distractions and focus on "real" real estate investing if you know the difference, so here goes. The real estate market has been on fire. You are reading about the ridiculous low prices and high returns people are getting. You are convinced this is the best opportunity that you will ever experience. At first you disregard it as sales hype, but then you see the returns and all the tabloids talking about the impressive markets. So you plan to invest in real estate and make the big returns you have been reading about...you decide to check into this real estate investing thing. Here is where you will fall into one of two categories:
Chasing the Shiny object
You plan to invest for big cash flow, no wait, maybe you will do some of these fix and flips and make the big bucks. “It looks easy enough” or possibly some of this capital growth investing you are hearing is becoming so beneficial. You will buy a bunch of single family homes. Well... the multifamily investing may be best for me.
Yes, you fell into the proverbial chasing the shiny object syndrome. How the heck did this happen? Believe it or not, many people spend most of their life chasing the shiny object (their own little piece of gold). What happened is, you did your research through magazines and the internet and were getting smarter and smarter and confused and smarter and confused and smar… “Well hell, the values have raised so fast and the high returns are no longer that impressive. Oh, Damn, I missed it.”
The Purposeful Investor
You start out by giving thought to what you want out of an investment. You keep your strategy focused and deliberate. You pick one investment strategy that will best fulfill the goal and objective you have set. You write your investment plan on paper and focus on the goal in mind. You read up and get informed on the investment strategy that you have in place.
Now that you have your investment strategy in place, do what you have been taught to do since you first heard about real estate. You identify the best location for your chosen real estate investment strategy. The location that will reap the best, safest most sustainable returns.
Now you found your best strategy and know what and where you want to invest. So then you want to continue being purposeful so you:
- Find a source for properties
- Find a real-estate power team
- Find a source for your financing
- Establish an entity such as an LLC to create liability protection
Congratulations you are a purposeful investor. If you found yourself in the shiny object syndrome category: no worries. Real estate values are still rising, as are rents. There are always real estate markets that are stronger than others so you can always be a purposeful real estate investor. Just stop chasing every interesting investment strategy you hear about and pick one that works for you and you too will be a purposeful investor.