Make A Million With REI – Anyone Can Do It… Not Everyone Will

If you know me personally you know that I’m passionate about business. From a very young age I loved learning about business and knew that someday I wanted to start my own. My dad built a very successful business and later on became a business professor – growing up I was surrounded by it constantly. This is embarrassing to say, but in high school I started my own “business” building and selling duct tape wallets. I even went as far as buying hackie sacks at wholesale price and reselling them to my classmates. In college, I sold unwanted items on ebay. After college I started manufacturing and selling plant hangers. I’ve been around business, no matter how pathetic they may sound, my whole life.

Now I know what you’re thinking, “selling duct tape wallets is a brilliant idea, you must be a millionaire.” Well if you thought that, not only are you wrong, you’re also a dummy… just kidding. If truth be told, every business I have ever started has failed. I have failed a thousand different times in a thousand different ways. However, I have learned one really important lesson from all of this. Not all businesses are created equal in how likely they are to succeed. It’s not that I couldn’t have been successful with any one of those idea, even the duct wallets could have been great, but it wasn’t likely.

Learning this very important lesson is one of the reasons I decided to fully commit to investing in real estate. I knew the odds of success were extremely high. I believe that real estate is one of the few ways nearly anyone can be extremely successful. On the cover on his book, The Millionaire Real Estate Investor, Gary Keller, states this, “anyone can do it… not everyone will.” I believe this to be true – anyone can be successful with real estate, but not everyone will.

Below I explain 4 reasons why I think anyone can be successful investing in real estate.

#1 – Follow the big models

One of the reasons anyone can be successful with real estate investing is because there are big and simple models to follow. Have you ever heard the phrase, “don’t reinvent the wheel”? Well perhaps here more so than anywhere else is this saying true.

The path to generate a lot of passive income and wealth from real estate investing has been forged. We don’t have to create new systems or come up with original or unique business plans to succeed.

In fact, if you try to come up with new and different ways to succeed in the real estate game, your chances of succeeding is likely to be lower.

All one needs to do in order to be successful is to find the people who have been successful and copy them. One of the best models to follow, which I follow, is the one mentioned above – “The Millionaire Real Estate Investor” by Gary Keller. Gary Keller is extremely successful and he’s forged the way. Follow his advice and you’ll be successful.

There are many different systems and successful people you can follow. You don’t necessarily need to follow Gary Keller, but it’s a good place to start. All you need to do is find someone who is successful in real estate and copy them. My only warning is don’t be tempted by the get quick rich schemes – they don’t exist. Which leads me to my next point – real estate investing is a long term game.

#2 – Long term and low risk

Every investment in the world comes with some degree of risk. Whether you’re buying stocks, mutual funds, a business, or a rental property, all have a chance of failure. However, when it comes to real estate investing (and most other investments) the longer you’re in the game, the less risk there is.

If you buy a house today and sell a couple years later, there is a higher degree of risk you might lose money due to a dip in the housing market. However, if you hold on to a property for 20 years and then sold, there would be very little risk you would lose any money at all. Even if there was a dip in the housing market at the time of sale, it’s not likely you would lose any money because even a dip 20 years later is likely to be higher than your original purchase price.

If you commit to long term investing the chances of success are very high. If you want a get-rich-quick method than look elsewhere. If you want a low risk investment plan with high rewards, then committing to a long term real estate investing plan is one of the best options out there.

#3 – Numbers don’t lie!

The numbers with real estate investing are incredible and hard to argue against. I truly believe that if everyone truly understood the numbers with owning rental properties they would be quick to jump into the game.

I won’t go into all the nitty gritty details right now, but let me give you a simple example.

Let’s say you bought a rental property today under the following conditions:

Sales price: $100,000
Down payment: $20,000
Mortgage term: 15 years
Positive cash flow (after all expenses and taxes): $3000
Appreciation rate (the percent your house would increase each year): 3%
Total investment: $20,000

After 15 years here’s the breakdown of income and wealth you would generate:

Total equity (not including appreciation): $100,000
Total cash from rent: $45,000
Total appreciation: $55,000
Total value: $200,000

If you were to buy one rental under these conditions (which is reasonable if you follow successful models) 5 years in a row and did nothing else, at the end of 20 years (the year your last purchased property would be free and clear), you would have earned $1,000,000 ($200,000 x 5).

Disclaimer: There are a few other minute details not mentioned in above example. They were left out for simplicity purposes, so that you could easily understand some of the basic numbers surrounding real estate investing. But don’t be alarmed, some of the details left out of the above example would in no way decrease your earnings, but would actually add a little more to $1,000,000.

If you want to learn about the numbers in further detail check out my post here.