Wednesday, January 5, 2011

Flip or Flop: The Most Common Real Estate Myths

I'm sure you've heard that millions of people lost their shirts when the Real Estate Bubble burst. Well, I can tell you that thousands collected those shirts and added them to their closets. In fact, smart investors make their money when other people are loosing it. I guarantee you that more people than you know made millions off this crash, not just in real estate, but in the markets too. In fact Warren Buffet (Berkshire Hathaway) posted a gain of $6.3 billion in just the last three months!

I read a lot and observe a lot. One thing I've noticed is that when people talk about investing in real estate they usually have no clue what they are talking about. There are so many misconceptions, and so much bad advice out there that I don't blame them. Many common strategies are designed to make money selling books not real estate. Comming soon is an eBook Flip or Flop, discussing the most common real estate myths out there. Below is a taste.

Flip or Flop
Benjamin Bowman

1. Zero Down - HA! HA! That's funny, but I hear so much about it and there seems to be a never ending source of books about it. The fact of the matter is that lenders want ALL investors to have skin in the game. They want to know that when times get tough you're not just going to walk away, as so many people have. There may have been at a time, but now there is no such thing as "zero down."

2. Real Estate Always Goes Up - . . . Do I really need to say anything at all? Probably not, but for some reason people still believe this. No one will ever say it out loud because they are afraid of sounding like an idiot, and they would. However, actions speak louder than words.

3. Buy Low; Sell High - Duh! I've never seen a piece of advice so over simplified. This is sound advice for all investing. Now that you know to "Buy Low" and "Sell High," you'll never loose a dime! That's why all the professionals never loose a dime, right? No, and it's not good advice. The reason is the blatant acceptance of unnecessary risk.

4. Flip It! Flip it Good! - I hear stories about this one all the time. I always hear about the loads of cash people make over night. Great! Lets all do it. Too bad this is probably the worst way to invest in real estate.

5. Borrowing is Investing - "I'm a real estate investor." Really? How much of your money have you invested in real estate? How much of other peoples money? Too many people think that borrowing money from the bank to use in real estate makes them an investor. More than anything it makes them an extension on the banks investing arm, except the banks gets to avoid most of the risk and you're on the hook.

And more...

Tell me what you think on our face book page and get a free copy of the eBook when it is released.


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