Real Estate Investing is a Process

I loved Tom's post titled, "Gonna Burst Your Bubble." Why? Because he is right. We are faced with so many choices about how and where to invest. I recently wrote about these choices in February's Income for Life Newsletter. I listed each choice and explained which investments give us the most leverage. If you haven't received your February newsletter yet, you're going to love it!

Here are a few of our investment choices: stocks, mutual funds, bonds, single-family homes, multi-family homes, rehab deals, apartments, etc.

Tom wrote, "Your investing career is a process." This was the case for me. When I graduated from college (university for our Canadian members), I began investing in mutual funds. Then I purchased my first real estate investment, a two-family home. I went on to acquire single-family homes, commercial properties, apartments and mobile homes. This has been a "process."

One investment followed another. I moved on to larger investments as my experience and knowledge grew. We all have limited time and resources. Don't try to invest in everything at the same time. You'll drive yourself crazy and you'll ultimately lose money. Had I chased every opportunity in the beginning, I probably would have been too confused to actually start investing. I would have been pondering the question - "What should I invest in first?"

I didn't have this challenging question to deal with when I started. I was focused on one type of investment. It was almost like I had blinders over my eyes. In hindsight, this made investing a great deal easier. I wasn't confused. My attention was focused. Over the years, I shifted my focus from one investment to new investments. I also learned a great deal from each and every investment that I made. You will too.

With each investing experience, I was able to refine what I wanted. This "process" led me to focus on one major strategy - which has since become the foundation of Income for Life. I evaluated all of the other investing choices and looked for the one approach that provided the highest return with the lease amount of time. I applied the 80/20 principle to all of my investments and one specific strategy jumped out at me. (This strategy is detailed in the Income for Life New Member Kit.)

What does all of this mean?

1) You must pick one investment approach and just start. It really doesn't matter what approach you start with because you're not locked into this one approach for the rest of your life. I started with a two-family home and went on to try other approaches. Starting, not what approach, was the key.

2) What you learn with your first investment is more valuable than the money you make. Yes, I realize you're investing to make money, but if you're a serious wealth builder, the experience is more valuable than the money. This is true, even if you pick the wrong investment approach. For example, let's say you start by flipping homes. Let's also say that you lose money on your first flip deal. Is this bad? No. Your knowledge level has just increased exponentially. You now know several things not to do. You can use this knowledge and experience on your next investment. Investing really is a "process." The more you do, the better you get.

I often ask our experienced Income for Life Members this question -

"What is the BEST investment you've made?"

Do you know what their answer usually is? Their very first property. The reason is because they finally got started. Their answer has nothing to do with money. It has everything to do with the self-confidence and knowledge they received from going through the "process." Everyone wants to invest in real estate, a select few actually start.

There is no ONE solution. There are several choices, but only ONE process. To be successful, you must commit to going through the "process." It all begins with your first investment, whatever that may be.

Rob Minton
www.QuitWorkSomeDay.com

Comments

[Josh Schoenly]

I belong to several local investor clubs. It never ceases to amaze me the number of people at those who don't get this idea of process versus event. They think they need to go out and learn everything there is to know about every real estate investing strategy in order to increase their level of comfort or prepare themselves. I know that I can say with myself the best thing I did to get my investing career was to get the "process" started with my very first investment. If I hadn't done that I might still be on the sidelines wonder what if. Go out and get your process started today, take action!!

[Richard Sander]

You and Tom nailed it. When I was living in New York in the early 90's, the tagline for their lottery was, "You can't win if you don't play." I see the fear factor all the time here in Myrtle Beach.

If what we do is likened to hang gliding, our systems are the strength of the glider, and we as coaches are the wind providing support and 'lift'.

The glider is strong, the wind is steady, but ultimately, it is still completely up to you to take that first step off of terra firma in order to soar with the eagles.