Real Estate Investing Starts with 3 simple Questions to start your Resource Planning
On my journey to alter my life and do what I want, where I want it and with who I want, I needed a vehicle to get me there. Much like you would travel from Southern California to New York, some of your vehicles of choice might include, an air plane, a train, driving or the long route if you have the time and money a boat ride through the panama canal.
Each of these vehicles or methods of travel present certain advantages and disadvantages as well as some things is common. They all take time and money, even if you have frequent flyer points you spent money in the past to earn them, so that would be a use of a type of credit.
- A plane is quick, as little as 4-5 hours, it may or may not cost a lot of money depending on deals found. Your disadvantages would include not seeing or experiencing the country during your trip.
- A train would be considerably slower taking days. It might be cheaper than an airplane, but you get the time to view the countryside, see the changes in the different areas of the country. You have time to read some books, make some friends, get more work done, etc.
- Traveling by water without a doubt would be the longest journey. It could potentially be one of the most expensive as well as unadventurous for a great deal of time until you reach the panama canal or stop into planned ports. The advantages are numerous if the time element is not a concern, you would meet people, perhaps make new friends, business associates, close some deals in work, get a tan, etc…
These choices start with questions which at this point are probably obvious with how much time, money and what is the best way to travel. In which case you would most likely consult with someone who has done the type travel that you are interested in taking.
All of this seems like common knowledge to some of the readers, but others, just haven’t stopped to think about such options, advantages, disadvantages or even costs whether monetary or time.
Real estate investors share these exact same choices when investing in property.
How much time does an investor have to invest with his/her time? That depends on what they want to do, do they want to flip the property and make a gain/profit or do they want to hold the property bringing in money month after month over time. Then there is repair, management purchase, selling, etc. all requiring different amounts of time. But do you think an investor does any of the manual labor, contracts, buying, selling, etc? Most likely not, the investor uses Other People Time (OPT) to get accomplished what needs to be done. He/She purchases other peoples time. Just like travelling from coast to coast what amount of time an investor has or wants to dedicate is a choice.
Remember those frequent flyer miles? That’s a form of credit. What about a company paid trip, that is also a type of credit. What about being flown by a blessed couple who has the funds to include you in their wedding and the trip is on them? All of these examples are about Other Peoples Money (OPM). It’s a misnomer that to be a real estate investor you must use your own money or credit. As in my example above for travel, I never said you had to pay for the trip, it could be company sponsored, won by lotto or contest, financed on a credit card or even as a guest of someone else because you have the time or the next subject knowledge to help another person out.
All people gain knowledge differently, that’s because their life choices and experiences provide different knowledge. Even the education level, friends, mentors or books read would alter your experience from another’s who is sitting right beside you for the same journey. Your knowledge is unique and valuable to another person who does not possess that experience or want to learn it or even have the time, so they might gladly pay for your time and knowledge to get what they need. Just as an investor would. They may not have the expertise in contracts, accounting, building codes or materials so they will higher those weaknesses and stick to their strengths of finding good investment property. As a matter of fact I have an investor friend who did not even know how to change a light bulb let alone what kind of light bulb he should buy, yet created a net worth in the 7 figure range within three years of deciding to become a real estate investor.
Whether you are travelling or investing in property there are 3 basic questions that you start with…
- How much Time to do I have to _________ ?
- Where will I find the funding/credit to do this project ?
- What knowledge do I need to take on this endeavor ?
With these 3 basic questions we can start to look at real estate investing from a different and more essentially fundamental way.
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