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Learn what NOT to do as a real estate investor by watching this video. Learn from my mistakes and build a successful real estate investing business.
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What NOT To Do As A Real Estate Investor
Joe: Hey, it’s Joe. What not to do as a real estate investor. Oh, there’s plenty of things, but there’ some main things to watch out for.
Joe: They say you need money to make money, but I say if you can’t make money with no money you probably can’t make money with money. So. With that said, my number one rule is don’t borrow money from banks. Don’t risk your credit, don’t risk your capital. Don’t use your cash to buy properties. Instead, use your brain. Use leverage. Use seller financing. Use the zero down structures that I teach, Subject To, Multi-Mortgage, Land Contract/Contract for Deed, Assignable Cash Deals, Lease Options. These are the things that you can use. These are the structures that you can use that will allow you to buy properties and not take any risk. You’re not risking your credit, you’re not risking your cash.
Joe: Yes, you have some other risk involved, I mean if you screw things up you could get sued. But you have insurance for that. You can protect yourself in so many ways. You can set up LLCs to protect yourself from lawsuits and limit the amount that can be taken from you if you lose a lawsuit. So, those are all things that are important.
Joe: And I think maybe the top of my list as far as what not to do as a real estate investor is don’t act unethically. Be honorable in your transactions. Approach this business with a service mindset. Be a servant. Because if you approach it with that servant mindset, you’ll be out there trying to solve problem. Treat everybody that you work with as though you love them. Treat them as though they’re family, like it was your mom or your brother or your best friend. Make sure that you treat them with kindness and with generosity and try to do the best to help them solve the problem that they have.
Joe: If you’re helping people you’re going to make money. Because if you’re using the structures that I teach those structures will solve their problems and it will make you money doing it. So, it becomes an honorable, ethical charity in a way. It’s the way a charity should work, in my opinion. Instead of having to go out to some rich guy and ask him for donations for your charity, you use the structure of the business itself to support itself, to make it self-sustainable. To make it profitable for you so that you can build your life and then you can give back to the community after you’ve received all the things that you’ve received. And you can give back to your family, you can give to your children, you can give to your spouse the life that you want for them and the life that they would like to have.
Joe: And you’ll have the pride of being able to do it. It feels good to accomplish these things. It makes you feel like you have a purpose in the world. These are the things that you want in your business. You’re not out there to screw some old lady out of the equity in her home by getting her, you know, beating her down on the price – that’s not a sustainable, fun way to live. You’re not going to be able to sleep at night. Or, maybe you can harden yourself so that you can sleep at night, but maybe it makes sense to solve the problem.
Joe: That doesn’t mean that you’re not going to get properties that are under market value. I find properties under market value all the time. But I solve the problem for that seller. And even though there might be a way for them to go out there and make more money, I tell them what that way. I say, you know, you could do this, or you could do this and you could make more money at it. It’ll take more time to do it and these are the other issues that might arise while that happens. You know, what’s most important to you right now? Do you want the money, or do you want to just get rid of this headache? Do you want the time? What’s most important to you?
Joe: And the properties that I buy are typically because people don’t want to deal with it anymore. And so I’ll get these properties under market value. The ones that want to make more money, I can help those people make money as well. Let’s say somebody’s got a property they’re trying to sell for sale by owner. They can’t get it sold. Maybe they don’t have enough equity in the property. It’s going to make sense for them to keep that property for the long term because it’s going to be a retirement benefit for them. And they’re going to be able to live on that property for the rest of their life once it’s paid off.
Joe: So, we help those people and we walk them through this process and we act honorably and that’s how you avoid making mistakes in this business.
Joe: Now, having knowledge and having competency, if you’re not competent you can screw things up, even if you are trying to act honorably. So, learn the processes. Learn the things that can go wrong. Learn how to deal with the transaction when it falls apart. These things aren’t difficult to learn and you can learn them pretty quickly. I’ve talked about a lot of them in these videos. I talk about them with my mentor students. Almost every one of my mentor students – me included – have gone through failed transactions.
Joe: In fact, probably one in ten transactions will fall apart no matter how good you are. That just happens because people back out, people don’t necessarily live up to their own agreements. And so you get stuck sometimes. But if you’ve structured the deal properly at the beginning you won’t lose money when that happens, or if you do, that money will be very limited.
Joe: All right. So, those are the things to look out for. Good luck. Subscribe to my channel. Go to JoeCrumpBlog.com, sign up for my free newsletter. Go to ZeroDownInvesting.com and find out about my six-month personal mentor program. It’s like going to college for a semester. It’s about as expensive.
Joe: All right. I hope that helps. Good luck.