Is Real Estate Hard? (Honestly)

The same question I could ask you (and probably would get the same answer) is: are Mathematics difficult? Does 1+1=2 appear to be difficult?

Well…if you are just jumping into it and have no idea about it, you could probably lose your shirt. But you probably thought in first grade that one plus one did four. It’s all part of the learning process. What I see, is people that are too focused on things in their every day lives that frankly, don’t make any sense or at least don’t help you improve your financial situation and state of success. People generally look at real estate, as the “passive income” solution. Everyone imagines themselves lying around in the Bahamas, and cash rolling in. But in reality, unless you are a Hollywood actor on set, that couldn’t be further from the truth.

That is because real estate, is a full time job of its own. Whoever gets into it, to just work a few hours a day, will get themselves crushed…I promise!

Real estate isn’t something that can be taught necessarily. How come people didn’t predict the 2008 disaster? Theoretically when you master something, you won’t fall for such a disastrous situation. The thing about real estate, is that it’s an always learning process. You never can know it all, and that is because it is so unpredictable. Who would be smart enough to think that the range of years between 2008-2010 would be the best for investing? People that invested back then (like our President) made a small fortune. Basically, the general rule of thumb in real estate, is that you will make money when you sell, and someone believes that in buying the piece of property you have, he can make more off it. I mean if you are selling because the piece of property has no potential, then you won’t find a buyer. So always, there is someone that is right, and someone that is wrong. But on top of that, you have variables (a bunch of them) such as luck, emotion and personal reason. For instance, if someone inherits a property he doesn’t like, or needs to pay such high taxes on, that would rather get rid of it, then he isn’t wrong in selling it, and the buyer isn’t wrong either. It’s just that motives are completely different, and both happen to be right. The seller wants to sell to afford tax payments, and the buyer is getting a bargain.

So it is reality so complex, that you can’t rap your head and tail around it. At the same time though, because there is such misinformation out there, there isn’t that much competition and education regarding it. Whenever you get mass level education (lots of people have access to it) then it loses value. It’s as simple as that. So you always need to stay ahead of the pack, if you want to thrive or even survive. That is the tough part of real estate. The 50 year old couple, that wants to work a few more years to head into retirement, won’t ever win in real estate, because their understanding of real estate, is something that keeps bringing in money for them, without moving a pinky. I can promise you, that if that’s the mentality you got, you will be dead in a few years from the launch date. There is just so much competition, and no space for amateurs that want to play around. Also, most likely you will get ripped off.

The main problem with real estate and people trying to get into it, is people have a great misunderstanding about loans. A bank loan (no matter what your financial adviser says) is your greatest ally. You will never ever find yourself to be successful, with cash. There is just no way. Even the real estate tycoons, borrow hundreds of millions of dollars. That is because you can buy yourself a real estate deal, with only 25% of the value of the property. But that is for another time.

Our goal here at GMS properties, will be to help you get some basic education on real estate. Get some fundamentals in there rolling, so that you can start experimenting by using this knowledge. We are going to try and be consistent, and as we said in our latest article, we won’t forget you for weeks and weeks. So don’t be shy, and always express your opinion or concerns.