In today’s episode, I’m going to talk about gurus. I don’t have a problem with someone who knows a lot about the industry and wants to impart that knowledge onto new investors and charge for it; I do that. But there’s a stigma that goes along with the word guru and I don’t want to be known as a guru because that word has gotten a negative meaning in recent years.
When I talk about gurus, I am referring to people who sell products for a living and call themselves real estate investors. Someone who perhaps used to do real estate but then started selling products and realized that selling information was more lucrative, so they haven’t invested in real estate in years. Or even someone who has never invested in real estate, but sort of learned the buzzwords and the lingo and understands what you’re supposed to do, so they sell that information to new investors who don’t know any better. Gurus promise new investors the world and do not deliver. They’re information peddlers who have no relevant knowledge of actual real estate investing in today’s market.
Here are five things that the gurus will never tell you:
1. This business is hard.
The concepts are not hard, but this business does take a lot of hard work. If you’re willing to work hard and sacrifice some things, you can be successful. But it absolutely requires a commitment level that most people are not willing to put in. The gurus make it sound very easy, and it’s not. It’s hard work and a lot of it is not glamorous.
2.You will not get rich quick.
I don’t know anyone in this business who got rich overnight. I know people who have gotten to a successful place relatively quickly, but it wasn’t quick by their estimation; there was a lot of hard work that went in before anyone knew about it, and some of them put in a lot of hard work and made no money for a while. You will not get rich quick. You can get rich, and it might happen faster than climbing a career ladder, but it won’t happen overnight.
3. They are not actively investing in real estate.
Either they never did, or they used to at one point but haven’t done it for a long time. You want to make sure that whoever you’re listening to and buying products from is actually doing business right now–not ten years ago, not twenty years ago. You definitely don’t want to learn real estate from someone who’s never done it.
4. You are going to need money to invest in real estate.
I’m not saying that you personally need to have money (although that helps), but it does take money. I don’t care what kind of real estate you want to do, it’s going to take some money, whether it’s yours or from a private investor or a bank. Somebody’s going to pay somebody. Even if you’re wholesaling and don’t need to buy a property, you will still have to spend money on marketing to make it a business. When people say “no money down,” that might be technically true, but you’re going to have to find money from other sources.
5. You can and probably will lose money on a deal eventually.
You can’t think any investment is 100% fail-proof–anything can happen. Eventually, there’s going to be a deal that goes south badly enough that you lose some money. If you do a good job and if someone who knows what they’re doing is guiding you, you might not lose money for a long time, but it could and probably will happen eventually. Even successful, experienced real estate investors will tell you about a deal or two that they lost money on. I hope it doesn’t happen for a long time, and I hope that when it does happen you are able to get through it, but it will eventually happen.
Be careful of courses that make it sound too good to be true, because it probably is too good to be true.