Stay in the property game long enough, and the wins and gains will come. Property investing wins, even small ones, compound over time. Creating financial freedom is a long game.
You have probably heard Warren Buffett’s first 2 rules of investing about not losing money and remembering the first rule. Check out Blandon’s property investment mistakes video for insights. (5,000+ views )
The wonderful thing about property, over the long run, is the values (generally speaking and based on the historical track record) keep going up. So if you invest diligently, the gains will come and they will get bigger as the years go by. It does help that debt goes down and is eroded away by inflation (especially at the moment) whilst the house prices go up.
I have personally talked with 2,500+ people about their property goals in the last 5 years. Failure in property investment (and attaining financial freedom in general) stems mostly from a limited mindset and a lack of urgency. It is not because of income, earning power or savings.
So many budding investors are thinking about property investing as hunting. They are after the big kill and fall in love with a potential purchase, then spend a lot of time, money and energy working on that particular property only to miss out at auction. Or even worse, they do a tonne of research on the keyboard but don’t take action with a conditional offer and end up missing out.
Property investing is more like fishing.
Patiently waiting but always with a few lines in the water. You have set the bait right and have done the prep work, you don’t jig at every little bite, you wait for the perfect moment to strike and you do not always have to keep what you catch. By being ready to fish year around you will catch something great eventually.
Plenty of people with relatively low to mid-level income, and not much of a starting deposit, have become tremendously wealthy and have created life-changing circumstances for themselves because they stayed on the path long enough.
This is a video from the Property Formula Workshop. There are several unlocked for you and included in this course. To get access to all videos and spreadsheet calculators please apply for the workshop.
We all make mistakes, how we accept them and push forward is what defines us. The awesome lesson we have been privileged to learn is what works and what doesn’t. We have seen what success and failure looks like and we’re trying to help you find the right path.
After talking to so many successful property investors, business owners, and typical ‘mum and dad’ investors, we see the trends that lead people to achieve their passive income goals and the habits required to get there. I made a video a while back for some of the team about investing mistakes.
When you are early in your working life, buying is going to be easier even if you’re short on deposit, as long as you have the income. Many times I have talked with business owners who wait until the end of their working careers and look to ‘buy’ income-producing properties so they can sell their business.
The unfortunate thing is their business is not worth that much and buying property is out of their reach because of factors like income, age, affordability, lack of willingness to learn. If this is you, it is not too late, you just need the right advice before you stop working.
Working with a mortgage adviser will help you get in front of mistakes before you make them.
Before you buy a lemon of a property.
Before you structure your mortgages on a 5yr term (which might be a massive mistake).
Before you buy investment properties in the wrong tax/ownership structure.
Before you sell and property and expect the proceeds and then the bank takes the money.
Before you ‘sell to buy’ because you think you cannot ‘buy without selling’.
Before you lock your parents into guaranteeing your loans when all you have to do is use 2 different banks and structure a gift or loan arrangement (covered in week 3 emails).
There are many common mistakes easily avoided once you know the tactic to combat them. There are many complicated, rare mistakes, not often spotted by inexperienced investors and advisers, that can seriously hinder your wealth building.
Imagine I said I would do your job for a day…
‘barber for a day’,
‘cop for a day’,
‘plumber for a day’,
‘mechanic for a day’,
‘nurse for a day’,
just laugh to yourself all the mistakes I would make.
Some would be easily corrected but some potentially dangerous. The harm may not be physical when messing up mortgages and property investing, but it’s still serious stuff that doing it yourself without guidance seems silly.
P.S. it is time to move into borrowing power calculations and understanding your lending options. Check back tomorrow for more information and fill in https://mhq.co.nz/profile if you want your own spreadsheet to work from.
If you have not already, sign up for the most relevant mortgage masterclass based on your situation.