5 Misconceptions About Real Estate Investing

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5 Misconceptions About Real Estate Investing

There is a large amount of misconceptions about investing in real estate. In this post I am going to cover the most common ones to help you in deciding whether or not real estate investing is an endeavor you want to pursue.


Misconception #1- You Have To Have Money


This is a very common misconception about investing in real estate. The fact is that there are thousands of investors each and every day making money by using none of their own money.


I have personally done a great deal of real estate transactions with none of my own money. While there is an exchange of money involved in nearly every real estate transaction the key to remember though is that it does not have to be any of your own money.


If you are completely broke right now, do not worry. As long as you can bring something of value to a transaction and structure it properly, you can trade that for money that is needed.


For example, if you negotiated an amazing deal on a property you will not have any issues finding a money partner to partner with. Finding or creating the amazing deal is the hardest part.


The deal is a magnet for money. It is like the saying in Field of Dreams, “If you build it they will come”. If you find the great deal, the money will come!



Misconception #2- You Have to Have Good Credit


While good credit can play a large role with obtaining financing for real estate, there are so many other options available to you where credit doesn’t matter at all.


If you choose a niche strategy such as wholesaling for example, you could have the absolute worst credit around and it will not matter one bit. With some strategies your credit score never comes into play.


When I first started with real estate investing my phone was ringing off the hook with creditors calling. I was severely behind on credit card payments, do to financial setbacks, to the point of having all my accounts go to collections. As you can imagine my credit score was ruined.


This did not stop me from becoming a successful real estate investor.


If you have bad credit, DON’T let that be the reason that you do not pursue real estate investing.


Misconception #3- You Have To Have A Job


Many people are under the impression that you must have a job in order to invest in real estate. The main reason for this misconception is that when most people think of real estate investing they only think of buying a property by obtaining a bank loan.


You do not have to be employed whatsoever to invest in real estate as long as you choose a strategy that does not depend on your personal income to qualify for loans.


Misconception #4- Real Estate Investors Are Vultures That Take Advantage of Sellers


In every trade of business in existence there is the small minority that chooses to operate without honesty, integrity and respect. I strongly urge everyone who reads this post to make it a priority to treat everyone with the utmost integrity and respect.


You should never take advantage of anyone. Always look to make win-win transactions where both parties benefit.


It so happens that selling to investors is often the best solution for sellers. Many sellers find themselves in situations where they don’t have any money to fix up their home and list it on the market. Many can’t afford to pay the commissions that an agent would charge. Many don’t have the luxury of time to wait until a qualified buyer comes along.


There are many circumstances where investors actually become saviors for sellers. I have been thanked many of times by grateful sellers that did not have any other option.


Misconception #5- Real Estate Investing is a Way To Get Rich Quick


Despite what you may have heard on TV or read online, real estate investing is NOT a way to get rich quick.


There are many so called “Guru’s” out there promising that you can get filthy rich very quickly if you buy their course. You can buy a mansion, drive that fancy sports car and own a private yacht. This is the carrot that is dangled in front of “Newbie” real estate investors.


The reality is that it takes hard work to make it as a real estate investor. You must have great focus, patience and discipline. Real Estate is a vehicle that can help you reach all of your financial goals and dreams but it will not be easy and it will not happen overnight.


If you put together a solid plan of action, stick to it through the rough times and have a burning passion to succeed you can make a lot of money and obtain financial freedom if that is what you seek.


You will encounter many highs and many lows on your path to success as a real estate investor. It is just the nature of the trade.


One thing that sets the successful real estate investors apart from the wannabes is how they bounce back from the very low points. Some quit when “it” hits the fan while others just see the low point as another roadblock or obstacle to get around on the road to success.


If you have a burning desire to be successful in this trade, YOU WILL MAKE IT!!



I hope that this post was very helpful to you. If it was, please share with someone who you think may benefit from it. 

Here’s to your success!!!


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