Misconception #1: You must have money in order to make money in real estate.
This is most likely the biggest myth of all. Most of the time it does “take money to make money,” but not always so in real estate. There are many creative ways to get around this common misconception. All it takes to succeed in real estate is careful research and lots of planning. The first thing I would recommend is to start reading as many books on the subject as possible.
Misconception #2: Stay away from big deals when starting out because they are too risky, stick to the small deals instead.
When starting out many people feel most comfortable starting small but there have been plenty of stories of big deal success, all it takes again is lots of careful planning and make sure you do your research. Don’t shy away from the big deals if they happen to come your way, you never know that one deal might set you up for life financially!
Misconception #3: Anyone can get rich “flipping” their way to success.
This approach has been compared to day trading in the stock market by some experts. With every transaction you take a risk with no guarantees of ever making a profit. Another thing to consider is if you are financing one hundred percent of the property cost, you will more than likely be paying a higher interest rate which means less profit for you. However, there are many good deals to be found which in the end can net you a nice profit even after paying a higher interest rate. Just make sure you do your homework first.
Misconception #4: You never have to be concerned when investing in real estate.
This statement is unfortunately far from the truth, especially now days. Just about everyone who invests money in one thing or another, be it real estate or stocks will be somewhat concerned about their investments. To help make confident investments and lessen the worry factor just make sure to use common sense and also do your homework before making a single move on a deal. A word of advice, don’t let worry keep you from going after potential opportunities.
Misconception #5: To make money in real estate takes a lot of time.
The truth is that some people do spend a lot of their time on real estate deals simply because this is all they do. One thing to keep in mind is that we all have the same 24 hours in our day, it is how each of us spends this time that will determine what we will individually accomplish in life. If you don’t think that you have the time it takes to invest in real estate then I challenge you to sit down and look closely at your schedule and how you are spending your time. Chance are you will find the extra time that you need. You could be giving up a fortune by just sleeping in an extra 30 minutes a day. That extra half an hour per day equals a full 15 hours per month!