Do you have aspirations of becoming a real estate investor, well maybe speculator is more appropriate. Saturday morning television is your opportunity to educate yourself. The program line up is full of “how to get rich quick” schemes, infomercials and self paced education, with one guarantee. There is no limit to learning as long as you have the money to continue your education.
Taped television has the benefit of the “edit”. Simply put …everything looks easy and it always works out just as you had planned in the end. After all, Tiger Woods makes the game of golf look so easy and in the process serves as motivation to hundreds of weekend golfers willing to spend 5 hours searching for that one shot that will bring them back next weekend.
Real estate fantasy programs are no exception. The money guy drives around in his expensive automobile, making those around him appear to be unqualified and just hoping they can hang on until their lunch break. Looks easy doesn’t it?
Real estate buy low and sell high (hopefully) productions pull us in with the drama and keep us there. At first, there appears to be no downside to the increasing upside potential of the property in question. It’s so easy, why don’t more people do it? However, once the patient is put on the table and the cutting begins, the drama begins to unfold, and the cash infusion is administered.
The continuing deterioration captivates us as we sit there and sweat through the accounting details as the budget nears exhaustion. If the Kardashian’s put on hard hats and tool belts, the theatricals they produce in one hour still couldn’t compare. This is sit on the edge of your seat intensity as the interim owner begins to contemplate the safe return of a money market investment. That 1% annual return is beginning to look very attractive.
Account for the Unexpected
By most accounts, real estate investors, flippers, or speculators appear to be doing quite well in this market. I hesitate to refer to them as investors. My understanding of the word “investor” is someone who buys and holds, while a speculator is someone looking to make a quick profit. You say to-mate-o, I say to-mott-o.
The “we didn’t expect that” moment usually comes in the form of some hidden unexpected cost. Be it mold, termite, asbestos, drainage or dealing with the city building department, you can count on it just as sure as Tiger Woods will birdie the 18th hole on Sunday
If you have been involved in any remodeling or know someone who may have been, then you know what I am about to say.
You will always spend more than you planned. It’s one of the universal truths of remodeling.
The best way to protect yourself is to figure in cost overruns of 20%. If you come in under that, proceed to GO and collect your payday. If not, you averted the surprise attack and anticipated it.
Oh and those TV shows, I am always amazed at how cheaply they are able to do things. They need to publicize the name of their accountant.