How To Get Rich Slowly
I know, it is an unconventional take on getting rich, who wants to get rich slowly anyway? Actually, realistic people want to. Everyone knows the expression. “If it is too good to be true, it probably is”. "Getting Rich" in real estate is no different. In fact it takes hard work, determination, due diligence and the ability to take action. I know this goes against what many gurus will tell you, but we all have heard this for years as well.
So how long before I can create wealth in real estate?
I love this question much better. The answer is the one that everyone hates, “It depends!”
- It depends on how much investment capital you have to start with
- It depends on how much diligence you are prepared to do
- It depends on how bad you really want it to happen
- It depends on how much action you are ready to take
- It depends on your risk tolerance
- It depends on your short and long term objectives
The common denominator here of course is it all depends on you
Getting rich quickly is often perceived as (very little time and very little effort and voila, you are rich)
The reality is it does not have to take a real long time if you are action based and purposeful you can move along rather swiftly. It is not easy though.
Real Estate investing is like golf
It is sort of like golf, which is a simple concept. Use a club to hit the little ball into the hole. It is simple, but not necessarily easy. Investing is simple too. You put a little money in, add a whole bunch of borrowed money, buy a property and rent it or buy a property and flip it and make a profit. Yes, it is simple but not necessarily easy and therefore it is not a way to get rich quick with little time or effort.
7 steps to creating wealth with real estate
The speed at which you get rich depends a lot on you, here are some things to help you get there
1. Focus: interestingly enough the most important attribute to making it in real estate is the most overlooked one. Most people simply declare they want to make a lot of money and start looking at cheap properties. Again this is not a get rich quick scheme so you want to get focused. Make a plan and stick to the plan.
2. Establish funds: How will you purchase the property? Cash, financing, self-directed IRA, seller financing. The best deals come and go very quickly being ready to execute a purchase is paramount to buying the best deals so get these established up front.
3. Entity structure set up: Whether it be an LLC, a trust or another entity you want to begin as you plan to succeed. Liability protection as well as taxation planning should be addressed with your attorney or tax preparer in advance. I prefer my attorney and tax preparer talk together to maximize both liability protection as well as taxation protection.
5. Power team formation: another commonly overlooked attribute to making it in real estate. Identifying who you want on your team in advance is always an advantage, attorneys, accountants, realtors, trades people. You want all these people working for you and also helping you find the best investments. As they know what you are looking for they will rapidly go from an expense to an investment.
6. Property due diligence: Okay, here is where most people start and all too often end right away as well because they feel lost because they have not done the above steps to create the clarity and simply give up. With all the above in place you can look for the best property and analyze it against other properties to establish the best investments.
7. Purchase then duplicate: As you purchase great property you simply want to duplicate the process until you perfect the niche you are investing in.
The investor's’ biggest hurdle
The internet we use so often today is largely a double edged sword. It helps us to do the diligence we need but it also prompts the deadening (chasing the shiny object syndrome). Once you have picked your investing niche stick with it until you master it. All to often people get side tracked looking at what they perceive may be a better deal. While they spend time looking into this new opportunity they get sidetracked with yet another best opportunity. I have seen people do this for a 3 year period and never make an actual investment.
Find your niche and take action. The more action and diligence you take toward that action the faster the pace of your wealth creation. Getting focused and taking serious action will win the day.