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real estate investors |
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Obviously real estate has been, is, and will continue to be a vital way to build wealth and income.
But it's not easy. The business is full of challenges and even hazards that, ironically, real estate wealth-building seminars don't usually address:
Over the years I've helped many kinds of investors, in both securities and real estate, rich and poor, the one thing I've noticed about real estate hazards is sloppy assumptions. I suppose these sloppy assumptions happen because a real estate investment seems to be one large transaction - a "no brainer" - requiring little or no analysis, estimating, budgeting, or accounting. What seems to be closer to the truth is that while the purchase or sale of real estate itself may be one large transaction, it's a complex transaction. (If you've ever read a HUD statement, you know what I mean.) Furthermore, while it's a significant transaction, it isn't the only transaction. There are others that precede and follow it, and they all matter. Furthermore, if you consider yourself to be a true real estate investor, you will, or certainly should, be handling many transactions. There's this thing called "Deal Flow" that, whether you realize it or not, you need to be prepared to manage by getting the right organizational tools and professional help. Consider Accounting. Some of the worst accounting messes I have ever seen have been made with real estate investments . . . by, believe it or not, Certified Public Accountant offices! I have been astonished and dumbfounded by how CPAs have not helped QuickBooks users learn to use Classes to track their real estate investments, recklessly expensed transactions that should have been capitalized, and composed confusing, arbitrary journal entries to try to work around the mess instead of fixing it, that only perplex their clients, inflate fees, and mislead clients into believing that accounting is some kind of mystical voodoo instead of what it's really supposed to be: an understandable affirmation of common sense. If this description fits your experience, please contact me. Let's fix it. Another example is Relationship Management and Deal Flow. Successful real estate investing is an active, hands-on business that involves managing many relationships and deals. Sometimes it's like manufacturing; sometimes it's like retailing; regardless, it's certainly BUSY. I would submit that to be a successful real estate investor, you need something better than a rolodex or three-ring binder to manage everything. I've researched the best in contact and deal management, and have many useful tools to share. Finally, there's Project Management. Every real estate investment, whether it's being built or flipped, is a project with a definite beginning, middle, and end. Good project management helps bring it all together into one coherent picture so that, regardless how busy your real estate business may get, you can still keep your wits and sleep peacefully. For help with any or all of this, please contact me. At your service, Kris Freeberg, Economist |
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