I'm interested in getting into real estate investing but i have some questions...

[Phillip White]

Hi i recently went back to school to get my high school diploma and now i'm looking for a Career. i have some questions for you guys-

Can real estate investing be a career or more like a side thing?

Are there schools i could attend to learn real investing?

Also how do people start? like what if i don't have any money myself for investing, could i still be able to do real investing, like getting loans or something?

Is real estate still profitable, i have heard alot of people saying that real estate is dead, is this true?

If it is still profitable, it is highly possible to make six figures?

I'm really willling to put in the work that i have to to learn what i need to succeed :D

[Jon Holdman]

Wow! That's a big question.

First, let me distinguish between "investing" and "a job". Much of what is called "real estate investing" is in fact just a job that involves real estate. When you invest in something, you put your money into the investment. You get some form of payments back. Maybe right away and frequently, like when you loan someone money and they make payments. Maybe after a period of time like when you buy a stock for $10 and later sell it for $20.

"A job", OTOH, is something you do that earns money. If you work at McDonalds flipping burgers or at IBM writing code, you're working, and getting paid to work. Some jobs pay an hourly wage, some pay per piece you make, some have some sort of bonus potential. These jobs generally pay you for your time. You put in the time, you get paid. Some jobs are commissioned. Many sales jobs, whether you're selling used cars or million dollar whatever's are largely paid on commissions. You sell, you get paid.

Then there are businesses where you buy something and sell it at a higher price (stores), make something and sell it for more than it costs you to make it (manufacturing), where you dig something up and sell it for more than it costs you to dig it up (mining), or where you provide some service to your customers (restaurants.) With a business, you're often both doing some job (very often all the loose ends you can't hire someone to do) and you're making the decisions about the business. What to buy, how to price it, where to dig, etc.

"Real estate investing", in its purest form and IMHO, means owning properties that produce income. Whether its a house or a Manhattan office building, you own something that produces money. Same as buying stocks that pay dividends or bank CDs.

Many forms of "real estate investing" are more like businesses than investments. I would lump wholesaling, being a RE agent, developing, fix and flipping, mortgage brokering, being a property manager, etc. into this category. Like many jobs, if you turn the crank, you make money. If you're an agent, and sell houses, you make money. Many agents make a lot of money. Certainly six figures is entirely possible, IMHO. Most, however, make very little. Its a commissioned sales job. If you can close deals, you make a lot of money. Watch "[url=http://www.imdb.com/title/tt0104348/]Glengarry Glen Ross" sometime. Again, this is NOT unique to real estate. Many, many, many sales jobs are just like this.

In addition, many forms of real estate investing are like a small business. You must often invest money into the business. If you want to be a fix and flipper, you must not only do the job of finding a house, getting it fixed or fixing it yourself, and then selling it, you must create a business that has enough cash to run the business. Starting with zero dollars and successfully flipping a house (not wholesaling) is probably just about impossible these days. Even wholesaling, which is another form of brokering (IMHO), requires enough cash to somehow generate leads and then drive out there and talk to them. You'll make, I dunno, 100 drives before you actually close a deal. At $3.50 a gallon, that's several hundred dollars just in gas.

Can you make six figures or more doing these businesses? Absolutely. Is it as simple as paying some guru $10,000 and putting up a web site? No chance. If you bust your hump on one of these businesses, and you have some good luck, you can absolutely be successful.

Is it the right thing for you? I have no idea. There are LOTS of businesses you might do that would make a very nice income. Most businesses require some cash to get started. Yes, maybe you can buy one rental property with no money down (check the copyright on that book, though.) But one rental is NOT going to make you a six figure income. You'll be doing good if it generates a four figure income. Totally serious. A six figure income probably means dozens or hundreds of rental units. It probably means not only doing the investing part (owning the properties) but also the job part (managing the properties, doing small repairs.)

The way to become very successful is indeed to create some sort of business that either 1) produces an incredible valuable product or service or 2) employees lots of people. If you create a business where you employees create $15 of profit for every hour they work, and you pay them $10 an hour, you're pocketing $5 for every hour they work. One person works about 2080 hours a year, so that's about $10K in income to you per employee. You only need 10 such employees to make $100K a year. You won't, however, run such a business totally hands off. I've worked with a couple of CEOs of 1000+ people companies in my career and they are certainly not hands off. No matter what anyone thinks, these guys were the hardest working guys (yes, both guys) in the company. OTOH, if you make some product that takes you 100 hours to make, costs $1000 in materials and you can sell for $10,000 a piece, you can make 11 a year and make $100K and be working only half time.