Before getting into real estate investment, I have to admit that there were a few myths surrounding it that I too had fallen into believing them when I started.  As you gather experience and you go from flip to flip, you start realizing that certain things you saw as facts are just opinions, or even worse, fears.

 

These were some of the myths I believed in:

#1. To invest in real estate, you need to have your own cash or credit. 

What this myth implies is that it must be YOUR money that you use for real estate investments. This is not the case. In fact, it is normal practice for experienced real estate investors NOT to use their own funds to finance deals. 

Of course, there are certain things you will need to do and expenses you will incur in finding buyers and sellers, but these are operating expenses, not deal-financing funds. Also, there are many low or no-cost ways to generate leads; buyer leads, seller leads, and even investor leads. 

#2. You will not be considered a real estate investment ‘local expert’.

There is absolutely no reason for this to be the case. You will be able to develop the skills and knowledge needed to talk with confidence and authority about real estate investing. It is just a matter of getting the tools and practice putting your message across. 

As you start to talk to people about real estate investing, they will start to look at you as a knowledgeable person and you will get called upon as a local expert. This will open up opportunities for you. It will certainly help you get some good investor leads. 

#3.You need to be wealthy to get into real estate investing. 

It doesn’t matter how much money you have or don’t have or what your credit score looks like; or if you have no credit cards or assets. You can still get into real estate investing. 

There are different ways to get into real estate investing, without having to self-fund it. Here are a few: 

• You can start out as a real estate wholesaler. That was my chosen entry point. 
• You can start out with fix-and-flip projects. 
• You can start by taking a leap into rental property investing. 

What I’m trying to get across, is that you can set your real estate investing goals and achieve them without any cash or credit. 

All you need to leverage a real estate deal is your knowledge and your time; it is the investor’s cash or credit that will be used to fund the deal. So, wealth does not come into the equation. You just need to learn the skills and attain the knowledge to be able to speak with investors with enough authority, explaining the benefits so they will let you use their cash or credit. 

#4.Certification and a license are required for real estate investing.

This is probably the most common myth about real estate investing. There is no need for you to be, or become, a licensed real estate agent to get into real estate investing. You may well choose to go down this path, or indeed you may already have a real estate agent’s license, but there is no requirement for it. 

There will also be times when you’ll work with professionals that do have licenses, but there is NO requirement for you to have one for real estate investing. All you need; you will already have in your head.

#5. Real Estate Wholesaling is illegal or immoral.

This myth is based on the uninformed OPINIONS of people who have not researched what they’re stating. Wholesaling is not illegal and you don’t need a license for this type of transaction either. 

#6:  To be a good real estate investor, you need a load of experience

If this was the case, there would be NO real estate investors, because EVERYONE starts out with no experience! Everyone has to learn and, as you learn, you gain experience; and as you gain experience, so your goals will grow. That’s the natural progression of pretty much every business, not just real estate investing. 

You will learn which strategies and methods work best for you and which don’t; which methods you like best and the ones you don’t enjoy so much. You may start out fixing and flipping and transition into wholesaling; maybe even get into buy-and-hold or commercial deals eventually. There is plenty of variation in the career path to follow and this will be guided by the experience you gain. 

#7. The only way to finance a real estate deal is through a bank. 

Many people believe this myth until they get started in real estate investing; I was one of them. But it’s false and I was able to prove this very quickly. 

Banks can be used to finance a deal, but they are not the only way and they may not work for those people that have too much debt or a poor credit score. Even if the bank does accept you for a loan to fund your real estate deal, you will be capped on the number of loans they will give you. So, eventually, the banks will not work for anyone. That just comes down to their rules and nothing else. 

Good alternatives to banks are private investors. You’ll be able to raise private capital a lot quicker and with a lot more ease than you might have expected. The Cash Flow Diary method of raising private capital has proved immensely successful for many debutantes to the real estate investing world. 

#8.Failure is not an option! 

This myth has been left to the end for a good reason. What’s the big deal about failing? Failure is a normal part of life and it is essential to learning. 

Failure is unavoidable and unless you accept that you will fail, you will not be able to move forward and grow. You’ll be stuck unless you accept the risk of failure ‘events’. 

Think of it in this way, as events, and you will be able to find plenty of room for them in your real estate investing career. Failure is accepted by successful entrepreneurs as something they have to move through to get to their goals. That’s how you should view it too. 

Conclusion 

To conclude, there are plenty of myths surrounding real estate investing. These are mostly spread by people that do not know the business nor have taken the time to verify the myth. People that are successful in real estate investing are the sort of people that attain information and don’t let hurdles get in their way, certainly not made-up ones. They are not the sort of people to be swayed by a few ill-conceived myths.