- Joined
- Aug 30, 2007
- Messages
- 235
Thanks for the reply Greg.
I too have seen my share of "the gross under-estimation of related costs" in this business. The vast majority of investors, however absorb their negative cash-flow because they either have another business or a full/part-time job. Very few are full-time investors and while their dream may be to do Real Estate full-time (not always), they have trouble purchasing based on the criteria I discussed in my earlier post.
One reason for this is that most rely too heavily on Real Estate networks and/or Real Estate professionals (Realtors, Property Managers, etc...). Not to say that both don't add value to the investors efforts but both have a distinct conflict of interest with regard to the investor's purchases and the subsequent management of the asset.
Another reason is most investors do not apply a sufficient amount of patience, discipline, focus and clarity in their business.
The reality is that most investors invest on a part-time basis and, if they stick out their purchases for 5 to 20 years, will enjoy a great "nest-egg" type payoff on their investment based on asset appreciation and mortgage pay-down. Very few live off their cash-flow and/or invest in Real Estate full time. In fact, most investors position themselves in a break-even or negative cash flow position.
Its not really a failure as you allude to...its a different level of success compared to those that have chosen to focus completely on Real Estate investing and make it a full time job.
Lucas
I too have seen my share of "the gross under-estimation of related costs" in this business. The vast majority of investors, however absorb their negative cash-flow because they either have another business or a full/part-time job. Very few are full-time investors and while their dream may be to do Real Estate full-time (not always), they have trouble purchasing based on the criteria I discussed in my earlier post.
One reason for this is that most rely too heavily on Real Estate networks and/or Real Estate professionals (Realtors, Property Managers, etc...). Not to say that both don't add value to the investors efforts but both have a distinct conflict of interest with regard to the investor's purchases and the subsequent management of the asset.
Another reason is most investors do not apply a sufficient amount of patience, discipline, focus and clarity in their business.
The reality is that most investors invest on a part-time basis and, if they stick out their purchases for 5 to 20 years, will enjoy a great "nest-egg" type payoff on their investment based on asset appreciation and mortgage pay-down. Very few live off their cash-flow and/or invest in Real Estate full time. In fact, most investors position themselves in a break-even or negative cash flow position.
Its not really a failure as you allude to...its a different level of success compared to those that have chosen to focus completely on Real Estate investing and make it a full time job.
Lucas
