Money Rules for Real Estate Investors

July 24, 2007 · Filed Under Main Page, Money and Real Estate Investing · Comments Off 

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

If you’re going to invest as a real estate investor, you need to play with real estate investor money rules. It’s the same in any kind of sport. You need to know the game you’re playing to know what rules to follow.

If you’re going to play hockey, you need to play by hockey’s rules. If you’re going to play tennis, you need to play by tennis’ rules. If you’re trying to play hockey with tennis rules, you’re not going to have a very successful hockey game. That’s what often happens when people start to invest in real estate. They try to play this game called real estate investing with consumer rules. They mix apples and oranges, and end up with lemons.

What are consumer money rules? First of all, when you buy real estate as a consumer, it’s all about you and your money. In order to buy a property using consumer rules, you need to have excellent credit. You need to have enough money to make a down payment.

When you want to become a real estate investor, you will find that those consumer money rules often get in the way. They hinder you from making money in real estate. One of the primary reasons people are unsuccessful when they attempt to invest in real estate is that they think they have to invest in real estate the same way they invest in their own personal property.

In an expensive market, many people can’t even get into the game to buy their own homes. And in a very expensive market, it is almost impossible to charge enough rent to pay the mortgage. The result is that when people try to buy investment property using consumer money rules, most people cannot even get started. They can’t pay the down payment or they don’t have enough credit.

It is possible for people to build real estate portfolios following consumer rules. The problem is that buying real estate this way ties up your money and depends on your own credit. As a means to create financial independence, this is a long and laborious way to build wealth.

Investors live in a world that is different than the world of consumers. Even though we’re all living here on the same planet together, investors think differently. They know that there are different rules of money.

The first rule of successful real estate investing is to invest with investor rules rather than consumer rules. As a consumer, it’s all about you. As an investor, it’s about the property and the deal. The focus is taken away from you, your money, and your credit and directed to whether or not the deal makes sense. This is very good news for people who want to invest in real estate. You don’t have to have a lot of money or excellent credit to invest. You do need to know the investor money rules.

 

By Kalinda Rose Stevenson, Pd.D.

Want to discover the investor money rules? Find out how in a real estate investing book
 about the world’s most popular board game. Become a No Money Limits investor.

Tags: