Real Estate Investing for Beginners: Expectation vs Reality



Let’s debunk some common myths about real estate investing, and share what it’s ACTUALLY like, no sugar coating – enjoy! Add me on Snapchat / Instagram: GPStephan

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First expectation: Real estate investing is passive.
The reality is that creating the type of rental property to the point where it’s passive income takes a LOT of work. But the work is, at times, still ongoing. Eventually you’ll have a vacancy. Eventually you’ll need to fix things up again. Nothing will last forever. Sure, you can get a property manager who’ll handle much of this for you – but you will need to do SOME work yourself, even if it’s as small as choosing between finishes or approving bids on work. It won’t be an insane amount of work, but it will be something. So yes, real estate CAN be fairly passive…but it’s not passive if you don’t put in the work UPFRONT.

Second Expectation: In order to invest in real estate, you need to do the repairs yourself or be a good handyman.
The reality is that I can’t do anything besides change a lightbulb. While I do know some landlords who do the work themselves to save the money, this is absolutely not a requirement – and depending on how much your time is worth, it’s often cheaper just to pay someone else to do it the right way. It’s also worth noting that since all these repairs are a write off, you can write off the costs against your income…but, if you do the work YOURSELF, you cannot deduct the cost of YOUR OWN LABOR.

Third Expectation: It takes a lot of money to start.
The reality is that it often takes 10%-25% down to begin investing in real estate. This COULD be a lot depending on your definition of “ a lot,” and also on your area. Buying a property in Los Angeles would be significantly more expensive than in Kentucky, for instance. Where one person might be able to buy a property for $20,000 down, someone else might need $200,000.

Fourth Expectation is that it’s often like the TV shows.
The Reality is that it’s NOTHING like what they portray on TV. Oftentimes those TV shows will be loosely scripted around creating drama and creating a show that’s actually interesting enough to watch all the way through. Every episode needs a goal, a problem that arises, a solution to that problem, and then a resolution at the end. The real life problems that come up just aren’t that exciting or interesting. It’s often boring and mundane.

The fifth expectation is that you’ll make a lot of money investing in real estate.
The reality is that oftentimes one property won’t make you rich. Most mom and pop landlords won’t make a lot early on, but as they scale up, they can earn a significant amount of money from a lot of smaller sources. This is how many landlords start making money, enough to quit their jobs and invest in real estate full time. It’s growing your portfolio over one or two DECADES and accumulating those properties that might make you only $900 a month….but buy one of those every 18 months, and in 15 years you’re making $9000 per MONTH. That’s how most landlords make their money, and make a LOT of it. But the beginning will be slow and frustrating until you begin adding more and more to your portfolio.

For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness@gmail.com

Suggested reading:
The Millionaire Real Estate Agent: 
Your money or your life: 
The Millionaire Real Estate Investor: 
How to Win Friends and Influence People: 
Think and grow rich: 
Awaken the giant within: 
The Book on Rental Property Investing: 

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24 comments

  1. In order to get write offs on maintenance costs, would you have to make real estate a business entity? Or are you able to still write off maintenance while casually investing?

  2. I was at a retirement seminar and the speaker spoke on how he quit his job after he made well over $450,000 PROFIT within 3months he invested $120,000. I just began investing and i will really appreciate any tips or helpful guide.

  3. You say start small,i agree for ex i bought a house for 200.000 and i need to pay per month like 900 or 1000…
    How im going to buy in 1.5 year or invest in my next house when i already have a credit to pay????

  4. I’m 17 from uk , my net worth is roughly 40k and I’ve saved myself about 20k and have a job where I’m paid £1300 a month, I really want to get into real estate and looking for advice on what I should do. Should I stay at the job for a x amount of years and save up to a specific amount or even start now ? I also invest in stocks and have had a solid growth in my portfolio. I need help. Thank you in advance.

  5. So say… i start out with about 250,000. Would it be smart to buy a property out right and then rent it out, Or put 10 to 20% down on multiple properties and then pay those loans off over time.

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