Real Estate Investing – One of the Oldest Lies in the Book
You may have heard that wealthy people are wealthy because they make decisions quickly. This is true, and it is one of the most misused “facts” out there.
Don’t Believe Them
I’ve heard this used in a number of settings, but most often at guru real estate seminars. The presenter at the front of the room will inform you that one of the defining characteristics of the wealthy is that they make decisions quickly. Thus, if you want to be wealthy, you’ve got to stop thinking about whether or not you can afford to go to the seminar or boot camp that they are selling and you must go to the back of the room RIGHT NOW to buy their seminar or boot camp. Because the wealthy jump on opportunities when they see them, right?
Let’s shed some light on this situation, shall we?
Not long ago an acquaintance of mine gave me a call and asked if I’d be interested in helping him fund a resort project. That’s not what I do particularly, but I could certainly look it over and give him a quick decision or pass it on to others in my network.
He then told me about a deal where I could invest in a gold mine in the Congo. That’s right–gold in the Congo. The rate of return was great if I were to put money in it, but what in the world do I know about mining gold in the Congo? Absolutely nothing!
A 20-year real estate veteran can look at a house and decide if they’re going to buy it within a few minutes. Place an opportunity to buy into a gold mine in the Congo in front of them and they won’t make a split decision on it. If they wanted to expand into gold mine investing, they’ll study it out over days, weeks, or months before they start making decisions involving money.
Moral of the Story
The wealthy only make quick decisions in areas they are experts on. If anyone is trying to pressure you into making a quick decision and you don’t have the experience to know if it’s good or not, the decision should likely be “no”.
I can’t think of a single time I’ve regretted turning down someone who pressured me into making a purchase (especially a large purchase). If I’m at a real estate seminar and they cut their seminar price by 80% and start laying on the “once-in-a-lifetime” pitch, I’ll go home and think about it. Most of the time I wake up the next morning glad I didn’t jump at that opportunity. If I still want what they have a week later, I can always fly to the next city they’re presenting in and get the special price at that time. You will always have another chance at a good thing.
Your First Deal
This includes your first real estate deal. Sometimes beginning investors are so gung-ho about getting their first deal under their belt that they dive at the first opportunity they find. That’s admirable, but there’s a higher than likely chance it won’t turn out well.
It’s okay to make decisions slowly. Yes, good deals will pass you by at first but guess what? As you get better at this you’ll find that the deal of the century comes along about once a week. It’s true, but it’s only after you’ve studied many deals that you will be able to tell the difference between a great deal and a mediocre one.
You want to make your first deal a great one. It’s worth the wait as your knowledge and experience catches up to your ambition.