When you invest in real estate long term, what’s really at stake is your retirement. In the end, the path you take will either lead you to the retirement you want or it won’t. All the metrics us investment guys like to talk about so much – your returns on investment, equity positions or positive cashflows won’t matter at all if they don’t get you over the finish line. It’s a pretty brutal and unforgiving situation, if you think about it. Intentions, efforts and the such are completely irrelevant and worthless if they don’t lead you to the retirement you sought when you started investing.
So that brings up the question: Can you afford to get this wrong? The path you take today, the decisions you make on how, where and when to use your capital today will be the determinant of how far and fast you go. And in the end, the decisions you make are as good as the real estate investment advice you get – or don’t get. So, who’s advising you about your real estate investments?
If you were to ask any real estate agent if they work with investment properties, the answer will almost always be a resounding YES. After all, you’re just buying a house or two and they know how to sell you a house. They can send you a list of properties for you to look over and let them know when they should write up a contract for it. They might even use general and shallow investment terms like: “You will make a lot of money with this” or ” The ROI of this property will be off the charts”. The truth is they don’t know the first thing about real estate investing. And most importantly, they can’t offer you the most important necessary ingredient for success: A well-founded cohesive investment strategy. One that mitigates risk and maximizes long term returns. One that gets you over the retirement finish line. Remember this: Regardless of the vehicle you use – real estate, stocks, bonds, annuities etc – this is ultimately about protecting your principal and growing your capital to a point that the yield on that capital gives you enough after tax income to retire. If you’re just buying a couple of houses, you’re not investing – You’re just buying a couple of houses.
Another alternative for advice is to go to an investment club that offers “educational” seminars about how to invest well. There you could even network with seasoned investors that have a deal or ten you could buy today. These deals have tons of equity that these members are just passing on to you because they like you so much and they’d rather you make the profit off the deal than them. Next thing you know, you’ll be driving Hummers, wearing a lot of hair gel and dark shades. Sounds like a late night infomercial doesn’t it? Look I don’t mean to be cynical – there’s nothing wrong with folks wholesaling deals to each other. It’s a market that’s been around for a hundred years. But this is your retirement we’re talking about here. Do you think you should take advice from someone whose goal is to “flip” you a deal so they can make some profit that month?
When we start working with a new client, it’s usually the start of a lifelong business relationship that has one goal: Accomplishing the client’s retirement goals. Anything short of that, is utter failure and I don’t take that responsibility lightly. Whatever you do, make sure the quality of the advice you get is aligned with the goals you have. If you’re a long term investor, you owe it to yourself to work with a pro that will lead you down the path of success. Your retirement’s at stake.
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