May The Problem With Investment Properties
Real estate is my second favorite investment, next to investing in myself. Despite how much I love real estate investing, there is a major problem with it. This problem causes people to purchase unprofitable investment properties. An unprofitable property is one that doesn’t produce enough income to cash flow and be worth your time. Almost across the boards, when someone purchases an unprofitable investment property, they then begin to make sense of it by drawing an emotional attachment to gaining the title “investor”, or they claim that if they wait long enough it will pay off, or even worse they make sense of it by saying the real benefit is in starting early. The problem that causes all of these issues is starting too small.
What is too small? I believe too small is different for everyone. 4 units or less is definitely too small. For me, anything smaller than about $3 million in value is too small. Why? Because that is the monthly salary I pay myself from my business. If it doesn’t compare to what I can produce for myself on my own, then I am better off just producing it myself until I can do a deal big enough to get my attention. What does that mean for me personally? I’ve got to keep making more money and keeping it until I can do that deal. Too small will be different for you than it is for me. Starting small is a myth. I’m going to break those myths today.
Being an investor is a myth. Being an investor is like having a college degree. Nobody cares and it doesn’t mean you’ll make any money. It is an expensive investment that may or may not pay off. I know plenty of people who were eager to become and investor and started small so they could do it sooner. Almost all of them are breaking even or losing money. And if you’re breaking even, you’re losing money. Even in real estate. Owning a 4 plex or duplex just to be an investor is the same as going to college so you can get a degree. You’ll lose money, tout around a status backed by a piece of paper, and probably not make much more money than if you didn’t do it.
Starting early is a myth. There is no reason to start early. Starting early means you’re probably starting small. Unless you’re Donald Trump and starting with $1 million, then you don’t need to start early. You have no experience not only with investing, but with money in general. You haven’t created enough money, saved enough money, and practiced the discipline of not spending it. These are the traits that make a great investor and build wealth. A property isn’t going to help you if you haven’t mastered full control over your ability to make and keep money.
Time is on your side is a myth. This is called the deferment theory and it is used by people who know they made a mistake and don’t want to face it. Saying that holding onto a bad investment long enough until time magically makes it better is a state of complete apathy about wealth. Time isn’t on your side. That’s the entire point of investing. You’ve been trading time for money and can’t get it back and don’t know how much is left and so we invest so that we can acquire enough assets to stop trading time for money. You don’t know if you have time and that reality is in direct opposition of you, not on your side.
The solution is to invest in things that pay passive income for sure and require none of your time and attention so that you can go make and keep more money until you’ve saved enough for your first deal. This is how the top 1% built their wealth. They didn’t major in minor investments. They made lots of money, they kept as much of it as possible, and they waited until it was the right time to invest.
I can help you build a plan that tells you when to invest, what your first deal should look like, and give you all of the steps you’ll need to take between here and there to make it happen. This plan comes with coaching & accountability, daily education on wealth, a mastermind community of like-minded people to build with, and resources to connect you with all of the tools you will need. Click here to start your plan today.
Own Your Potential,
Grant Cardone Certified Coach
Jerry Fetta helps his clients make money, keep it, and multiply it.
He believes everyone should own their potential. He believes you were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.
However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.
Jerry helps his clients create wealth that exchanges time and money on their behalf.
His clients see a 30% increase in income, a guaranteed increase in savings rate, and 8-12% fixed annual returns on their assets in the 1st 90 days of working with him.
To get started, go to www.WealthDynamX.com/potential