Buy Real Estate Like On TV

I have noticed there are a lot of TV shows that promote buying real estate then fix it up and sell it for a profit.  With all these home renovation shows and the recent housing price jump, it has generated a lot of interest in making money like on TV.

It sounds easy, buy a cheap house fix it up and sell it for a huge profit.  Let me be the first one to tell you that this is entirely possible, but it’s not the easiest thing in the world to do.

There are a ton of web sites promoting something similar, the first thing I notice when visiting a lot of these sites is that most of these people have never actually done this.  From my point of view it is very obvious, and easy to spot.  

I just looked at a web site that was promoting their secret method.  First let me tell you the secret up front - here is the secret “it’s hard work” and you have to know a little about what you’re doing.  I would say 75% hard work and 35% knowing what you’re doing.

I know that does not work out to 100% because if you just willing to put in 100% you’re probably not going to make it.

Anyway, back to the web site, the first thing that is obvious that this guy has never done a real estate deal is when he starts off by talking about how the most important thing is the interest rate.  When anyone tells you this is the most important thing then you know they have no experience.

When your making 100% to 1,200% on your investment per year do you really care if you’re paying 4.5% interest or 5.2% interest?  For the math challenged I will help you out - no you don’t care at all.  

If you borrow 40,000 and pay an extra 2% in a year that’s $800 if you make a profit of $40,000 – that $800 = $39,200.  So what this guy is saying is - he wants to make a profit of $40,000 but he crunched the numbers, and before he starts working on this deal, he figures out that he will only walk away with $39,200 so he is going to not do the deal because he wanted $40,000.

If you don’t see the problem here, then what you need to do is keep your day job and work for someone else, or start your own course on buying real estate.