Are you new to the sport of Real Estate Investing?
Are you confused about the title of this article?
Pay close attention – I am going to save you a lot of heartache in this article!
You don’t know what you don’t know – and realizing this is the difference between success and failure in Real Estate Investing. It is true – the things that are going to trip you and lead to your fall are those that don’t even enter into your thinking.
You’ve read Rich Dad, Poor Dad by Robert Kiyosaki and so you are no the Cash Flow bandwagon. You hate your job. You are tired of putting up with your boss. You want out and you have realized that Passive Cash Flow from real estate investments is a good way to get there.
Understand, real estate investing is not rugby – it is chess at its’ highest level, and the truly difficult aspects are hidden from sight. If you are confused, as I hope that you are, it is because either consciously or subconsciously you are aware of the following:
Not Everything that Shines is Gold!
If you are confused, it’s because you are not able to make the finer distinctions past the formulas and numbers. It is time for some perspective – school is in session…
Relative to acquisition of income-producing assets, something that you hear me and others say often is that Cash Flow is everything; cash flow is gold. When I say this, I allude to several realities:
- Cash Flow constitutes safety as it allows us time to weather storms,
- Cash Flow constitutes financial freedom via passive income,
- Cash Flow is far less taxed than other forms of income, and thus we don’t need as much of it.
All of the above are indeed true – on the surface. But, there are a lot of things beneath the surface, and just because something cash flows doesn’t make it a good investment opportunity.
Why not – you are thinking to yourself; financed with 30-year notes these things cash flow like crazy? And it’s cheap and you can wrap your newbie brain around it. Besides, you seem to be getting all kind of reassurance from BP that this is a good way to go (be careful who you talk to). This, for a variety of reasons, is the worst thing you can do! Continue reading at BiggerPockets