3 Myths about investing in Real Estate

It’s important to shatter 3 myths that many people believe are impediments to investing in real estate.

Myth 1.

You can purchase real estate without having to see the property in person. I have had mortgage brokers, and real estate brokers comment about how it's impossible to purchase real estate from a distance. The fact is, once you overcome the need to see real estate in person, it will become second nature to you and you won’t even entertain the thought of visiting the property in person.

Now to be clear, this does not apply to properties that require a large rehab. This advice may or may not be applicable. I have not personally purchased a property that required more than 25% of the value of the home in rehab costs so I can’t speak for them. However, if you are purchasing a home that needs a paint job, kitchen repair, and removing a wall or two, etc, there is no reason why you cannot ascertain the condition of the property from a distance. Between a real estate broker who you trust and the property inspector, you should get a good feel for what fixing the property needs. This is not to say that you won’t have any surprises when doing rehab. Bear in mind, it's quite likely that you would not have noticed these issues even if had you visited in person. Once you get past this mind roadblock that you need to visit a property prior to purchase, you have just opened up a world of opportunity. Literally,

You are no longer tied down to the cost and time involved in scheduling visits all over the country. No longer are you tied down to the myth that you need a property that you can visit within a couple of hours' distance. In fact, by purchasing a property that is distant from where you live you have the advantage of setting yourself up to successfully make use of your time by not wasting time going down all the time to take care of issues. I have owned a property within a 30-minute drive and I cannot tell you how many times I visited the property to check on “stuff”.

Myth 2.

I need a broker's license in order to invest in real estate. Nothing can be further from the truth. If fact holding a real estate license can be a hindrance to getting a deal under contract as you have to disclose to the seller that you are a licensed broker which may scuttle a deal. If you have one great. You get to make a commission. But there is no need to go thru the training of getting a license prior to becoming a full-time real estate investor. Many very successful real estate investors don’t hold a license at all.

Myth 3.

I need to have money to buy real estate.

Money solves all problems, right? 

Wrong. 

While it does help grease the wheels in life you are definitely able to purchase real estate without money. I know folks that open AMEX cards with a credit line of $100,000 and 0% interest for 12 months.

Some deal makers provide sweat equity where they either find GREAT deals or negotiate with the seller to do a subject to where they simply take over the existing mortgage payments that are already in place. Sweat equity is of great value and you should not be shy of demanding equity in exchange for your time and expertise.

The point is, it is possible to get into real estate without having money upfront.