Should you stick with real estate, or move on to something else? Many don’t ask themselves this question before they decide to start a career in real estate. They see people making money, and decide to get their real estate license. Unfortunately, people don’t realize how much work you’ve got to put in to become a successful at real estate. They end up blaming the market when they don’t do well, when in reality, they didn’t realize how much work it was going to be, and they don’t want to put forth that kind of effort. What does that result in? A year, to a few years of wasted time that they could have been doing something else. It’s hard to work for yourself. You won’t get a steady paycheck in this business. Anything you earn, you have to earn yourself.
Is real estate investing for you?
Save yourself years, and a fair amount of money by asking if it’s worth it to you to get involved in the real estate industry. This article is going to help you figure out whether or not “if the pain is worth the gain.” You’ve got to be a specific type of person to succeed in real estate. Now, succeeding means different things to different people. For some, it means making a comfortable living. For others, it means making it big. If you want to make it big, you’re going to have to go through a lot of pain for the gain. There will be many hard times, and don’t listen to anybody who tells you otherwise.
Becoming a master of the field
It isn’t until you become a master in real estate that you begin to reap the rewards. It takes time to get there. If you’re smart, you’ll get a mentor. It takes time to learn, and learning comes from from experience. You don’t get experience overnight. You get it through making deals. Seeing what works, and what doesn’t. And it takes time to get deals. Real estate is about delayed gratification. If you want instant gratification, you’re getting into the wrong business. Don’t get discouraged.
To become a real estate master, there are many different expenses you’ll endure, many different costs, and assorted elements that will come along. This is the pain part. If you don’t go through them, though, you’ll never master the business. Realize that mastering the real estate investing business is going to take the following three things:
1. Time: Mastering real estate takes years and years. You’re going to be putting in way more than 40 hours a week. And, if you have a real estate investing mentor, you can push that back by a few years. Of course, it will be worth it in the end, because the experience from having a mentor is invaluable and will help you succeed much faster than if you tried to do it on your own.
Now, this doesn’t mean that you can’t have a life outside of your job. You don’t have to have your health deteriorated because you are killing yourself working. But you will be sacrificing little things; you probably won’t have the time to dedicate to indulging in your trashy TV shows, or checking Facebook statuses. You’ll have to wake up earlier than you’re used to. This, by the way, doesn’t have to be a bad thing. Waking up early actually can increase your self-esteem. Whether or not you’re trying to become a successful real estate investor, you should get into the practice of waking up early.
You won’t get to go partying with all of your friends. If you want to succeed, you’re going to have to make some changes to your schedule that you may not like. Real estate is a gigantic commitment. Is it worth it to you? You’ve got to make that decision of your own.
Are you worried about the time you’re going to have to spend on real estate? Think about it this way. Even if you aren’t involved in real estate, you’re going to have to spend time working on something. As mentioned earlier, if you decide to get involved in real estate, you’ll have to change your schedule. No, you won’t be able to watch your trashy television show each Wednesday, but even if you do that, you’re spending time doing something. You might as well spend it on something productive.
2. Money: You’re also going to have to spend cash out of pocket when you start in real estate. At least thousands. That is, if you want to get the right deals. You’ve got to pay for a great mentor, and everything in between the deals in order to make money. Some of the earnings you make from deals you might have to spend on more education, or other things. Just because you made a deal doesn’t mean you’ve got all this cash to spend. A lot of times, you’re going to have to reinvest it into yourself and your business.
However, the biggest expense you’re going to incur is opportunity cost. Opportunity cost is the cost of time spent doing one thing versus doing something else. For example, on a given night you have two choices. Work, or watch television. You can do whichever you want, but each is going to cost you. In real estate, the opportunity cost is going to be when a deal falls through. A lot of deals don’t go as planned. They may fall through altogether, or they may simply not work out at all at the last minute. That’s months or years wasted on a deal that you’ve been working night and day on. And time equals money. Consider them learning lessons when it happens.
If you have a mentor, you can avoid a lot of bad deals, or deals that fall through. And, if you’re working with a mentor, you’re hopefully splitting the profits. Half of something is a whole lot more than nothing. Money is going to be spent. The good thing about spending money in terms of opportunity cost in real estate, is that you never had the money to begin with. So, if you work on a deal for a few months and it falls through, you didn’t make any money. But you didn’t spend much either. So, how much does that really hurt you in the end?
3. A creative mentality: Thinking is hard work; that’s why many people don’t do it. In real estate, you’ve got to actually use your brain. You have to be creative. Real estate is a creative business. You can’t go by a rulebook. “Well, this area is supposed to be doing poorly, so I won’t invest there.” A successful realtor finds an opportunity there rather than not bothering to even check it out.
If you’re freshly out of school, using your brain may be a little easier. But most people that get into real estate do it later in life when they aren’t making the money they want from their current career, and see the money that other people are making. Then they decide to jump on the bandwagon.
But they’ve usually been at their desk working on the same thing for years, and it can take a long time to remember how to think, and think out of the box. Real estate requires thinking out of the box.
This business is an emotional rollercoaster. It’s not easy. There are ups and downs, and it can be very draining mentally. Even if you have a great mentor. The rollercoaster actually never goes away. However, once you become a real estate master, you expect that rollercoaster to go up and down, so it stresses you out less since you know it’s coming. When you’ve paid all the dues, paid for the education, and start making money, the gains come in. The pain part is thinking, dealing with the emotional rollercoaster of opportunity costs, and shelling money out of your own pocket. That’s the draining side.
Whether or not you get involved in real estate, you’re going to be on an emotional rollercoaster. You’re going to go through one every day, because that’s life. If you’re young, better to learn that right now. Therefore, real estate is undoubtedly worth the emotional rollercoaster. At least instead of spending your time on an emotional rollercoaster thinking about relationships, or anything else like that, you’ll be spending it on something that’s actually productive and will be useful to you for the rest of your life.
So, should you stay in real estate or quit?
Well, this that depends. What is the biggest gain of staying in real estate? The biggest thing you can gain is financial freedom. And, freedom in general. If you’re successful at real estate, you have the ability to take time off to do the things you love. There aren’t many other fields that you can make a whole lot of money in a few months, and take a few months off.
Unless you’re a teacher, in which case you may get the summer off, but you’re making just enough income to support yourself. With real estate, you can make millions. What are your hopes and dreams? What are your goals? Freedom means many things to different people. Maybe you really want to help specific charities. If you really make it in real estate, you’ll have the money and time to dedicate to those charities, for example.
Is it worth it?
You must ask yourself if this business is worth it to you. Everyone who has mastered real estate answers that question the same way: it is absolutely, without a doubt worth it. They would do it again in a heartbeat. Why? Because of the freedom it brings them.
Real estate does not provide instant gratification
It takes time to find a deal, make the deal, and close the deal. It takes time to fix up a house. You aren’t going to hire a contractor to renovate the kitchen, and see the kitchen remodeled the very next day. It takes months. And, if the deal is a rental or a long-term hold, you won’t see the rewards for a while. When you first start out, you really are going to potentially have to wait 6 months to two years before you see any kind of gains.
If your personality is such that you want a reward anytime you do something well at your job, you probably should consider an alternative career. The investing world is not going to congratulate you when you close a deal. No one is going to say “Good job!” when you find a great deal. Except for maybe your spouse or best friend. You are not going to get praise from people in this profession.
If you want praise, you should consider sticking with your day job as an employee. You don’t get a bonus for doing something well when you work for yourself.
There’s a segment in another article written about being your very own cheerleader, and that’s true. Be your biggest advocate, because nobody else is going to be. The people close to you care about you, but at the end of the day, they look out for themselves. If you think that you’re going to find a deal tomorrow, have it flipped and ready to go by the next day, you are being extremely naive.
The good news is that real estate is always going to be around. If you’re willing to make it through the hard times, there will always be good times around the corner. The reason is that real estate is not going away. That’s one of the best things about the business. People will always need somewhere to live, right? Yes. The real estate investing profession isn’t going to go out of style. More land isn’t being created; more houses are. You do have to be willing to deal with delayed gratification, as previously mentioned. And again, if instant gratification is your style, you’ll want to choose a different path.