This is the Second, and concluding part of the Blog post, Investing in Real Estate. In this part, we will be putting up the next five Fundamentals of Investing in Real Estate, according to Eagle’s Height’s Real Estate Investing Manual.
Summary of Part One
In the first part, we enjoined investors, both green and seasoned, to imbibe some tenets. The first of these tenets, or fundamentals, is to seek at all times investments with clear, clean, and simple statements that are not slanted to deceive to ‘inspire’ the investor.
The second fundamental dealt with to find and know the people behind any investment because it is people we actually invest in and never the ideas, businesses, projects etc. thrown at us via papers, info-graphs etc.
The third fundamental informed us to to smart with our money, and not become a victim of the extortive banking system by the arts of ‘Savings”; we were enjoined to save to invest, rather to save for some mythical or phantom rainy day – Always Save to Invest, because the returns of your investment are what you’re going to depend upon to deal with the rainy days, should they manifest. Risks? It’s worse with the Banks than a high-grade investment.
The fourth fundamental spoke of being Disciplined by the arts of working to make abundance today rather than satisfy today’s need and want alone, and imbibing the art of acquiring knowledge so as to grow further in the art and science of investing, and life in general.
The last fundamental of Part One of Investing in Real Estate enjoined us to find and use the knowledge and expertise of others so as not to make unnecessary mistakes, and grow faster.
I believe we learn and are imbibing those vital fundamentals.
Investing in Real Estate Part Two
The Sixth Fundamental
Stay with known circle or circles of investment group or groups. Many people lose their money by sporadic and irregular investment moves. They invest in anything and everything and everyone that they come across on the TV, on some fancy websites online, and so on. When you invested in a company, a business, an individual, and the resultant transaction was bearing the promised fruits, stay ‘loyal’. When the same source of the investment shows up later with another opportunity, it’ll be easy to make a decision because there have been a track record of success. Now, the thing to do is to grow such a group into your investing or investment Network within which you play whatever segments of Real Estate that you’re knowledgeable or interested in. Rather than going wild across the horizon of investment, go big with few picks within your Network.
Number Six Fundamental = form an investing or investment Network by staying loyal to sources of successful investments you’ve made and enjoyed. Invest in few, known areas, and grow BIG, rather than investing ‘all over the place’.
The Seventh Fundamental
Don’t make a poor or bad return on an investment a reason to not invest again. We know this funny adage: “once bitten, twice shy”. This adage will be valuable IF one made a decision to be “shy” when he or she has an evaluated facts and figures about, 1) the person behind the investment, and 2) the investment. Do not make a decision because an investment you ‘knew’ should succeed because it has all the elements of success failed. That’d be like saying do ever go outdoors because it rained on a clear sunny day. Depend on empirical tools of 1) personality analysis, and 2) investment analysis. If these evaluations deliver into your hands potential success of the investment, don’t be shy. Go, get bitten again. It is in being ‘bitten’ that we learn.
Number Seven Fundamental = Base your decision to opt out of an investment, or to not invest with a person or invest in a segment, etc., because the last investment ‘failed’. Base your decision on empirical facts, and figures, always.
The Eight Fundamental
Have an on-purpose, aligned, and harmonious personal or familial investing group. Don’t engage in investment alone. Okay, I grant that this fundamental may appear untenable as individuals are better placed to risk their own money. However, if you have a family, husband, wife, etc., form them with you into an investment team. The diversity of opinions, perspectives, and personalities will reveal quite a lot of information you would ordinarily miss. The team should be formal, where both or all members knows their responsibilities, participate fully and without restrains in the deliberations, learning, decision-making, and returns etc., of team. Yes, one good head is better than five hundred. But two good heads are better than one.
Number Eight Fundamental = Form a team made of the trusted members of your family, friends, or associate with similar personalities, tendencies, interests, and desires, into your own investment team.
The Ninth Fundamental
Read. Critic. Ask Questions. Learn. Understand. and lastly, Repeat. Do these steps for every investment offer, proposal, idea, etc., thrown at you and your team. Don’t say “I know the promoter, he’s my brother”; don’t go the way of “the investment proposal is too bulky and technical…”; the way to get in trouble or not take a great opportunity is to say, “Oh, I have numbers! I’m not an accountant!” Such an individual or team will play in the Real Estate market blindly, and may make some money, but will not earn to their potential; that is if they don’t lose everything invested, every time. You can’t escape reading. if you depended on consultants and experts, they will communicate their advices to you in writing; facts, figures, and graphs, and you’ll have to read them!
Number Nine Fundamental = Read, Critic, Ask Questions, Learn, Understand all investment proposal, contract, etc., sent for your buy-in. Do same for those advices that your investment consultants or experts delivered to you. Without you understanding, you are not investing.
The Tenth Fundamental
it is vital that you have an investment goal; a broad goal as to where you are headed in the next 10, 20, 30 years with your money, and activities in the investing arena. Planning around and with the aim of realizing your investment goal is as vital. Your planning must be simple, implementable, amenable to changes, and above all it must be aligned with your own life purpose. On your hands, on a daily basis, should be a Daily Battle Plan as to What I Will Do Today that is an extract from your long-term plan. To plan is not important. To implement the plan, any plan, is the ultimate.
Number Nine Fundamental = Define an Investment Goal for yourself, and or Team, working out the details in the form of a long-term plan that is broken down into periodic segments, including Daily Battle Plans, with which you manage your investment activities.
Well, there you have it! The 10 Fundamentals of Investing in Real Estate. The fact is if you don’t, as an investor, follow these injunctions, one is likely not to be an investor, but a gambler.
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