What Real Estate Investors Know About Money - By: Kalinda Rose Stevenson, Posted on: 2007-07-24

If you're going to invest as an investor, you need to play with investor money rules. It's the same in any kind of sport. You need to know the game you're playing to know what rules to follow.

If you're going to play hockey, you need to play by hockey's rules. If you're going to play tennis, you need to play by tennis' rules. If you're trying to play hockey with tennis rules, you're not going to have a very successful hockey game. That's what often happens when people start to invest in real estate. They try to play this game called real estate investing with consumer rules. They mix apples and oranges, and end up with lemons.

What are consumer money rules? First of all, when you buy real estate as a consumer, it's all about you and your money. In order to buy a property using consumer rules, you need to have excellent credit. You need to have enough money to make a down payment.

These consumer rules often make it difficult when you want to buy property as an investor rather than a consumer. They can keep you from making money as a real estate investor. Often this is the reason why investors are unsuccessful when they attempt to invest in real estate. They think that they have to follow consumer rules when they invest in real estate. Instead of buying as an investor, they attempt to buy the same way they buy their own homes.

In an expensive market, many people can't even get into the game to buy their own homes. And in a very expensive market, it is almost impossible to charge enough rent to pay the mortgage. The result is that when people try to buy investment property using consumer money rules, most people cannot even get started. They can't pay the down payment or they don't have enough credit.

Even with these limitations, people do build real estate portfolios following consumer rules. The problem with this method is that it all depends on your money and your credit. You can create wealth this way, but it is a long and hard road to financial freedom.

Investors live in a world that is different than the world of consumers. Even though we're all living here on the same planet together, investors think differently. They know that there are different rules of money.

The first rule of successful real estate investing is to invest with investor rules rather than consumer rules. As a consumer, it's all about you. As an investor, it's about the property and the deal. The focus is taken away from you, your money, and your credit and directed to whether or not the deal makes sense. This is very good news for people who want to invest in real estate. You don't have to have a lot of money or excellent credit to invest. You do need to know the investor money rules.

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