Real Estate Investing Warren Buffet Style Part 2

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"The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."

You don't need an MBA to invest in real estate. I have an MBA in real estate and finance ... and if anything it made real estate investing more difficult for me for awhile. MBA school teaches you to assess risk in every possible way. It also teaches you how to analyze all the variables in every single situation.

You absolutely must consider the risks in a deal. And in fact, I shot a little video a few months ago showing you a simple tool to use to assess risk quickly. And you do need to analyze your options, but there comes a point where too much risk analysis paralyzes you and you really can become afraid of your own shadow ruining your deal.

The best thing you can do is focus on each deal ...focus on making sure the economic fundamentals of an area are strong and the property is in demand. And then factor in the biggest risks you can't control to make sure you're compensated for any real risks you're taking... and then roll with what comes your way.

Keep it simple. And then you'll keep moving forward!

"A public opinion poll is no substitute for thought."

In fact, I would go so far as to suggest that if you do use public opinion for anything at all you use it to judge where the herd is going so you can go the opposite direction.

Typically the best real estate deals are found when nobody is buying and the media can't stop talking about the housing crisis and the poor economic situation of the housing market. And typically when there is talk of everybody and their dog buying real estate for investments that is the time to sell your property or take a vacation while the rest of the world shops for property.

No matter what - do your own market research. The confidence and clarity that comes with doing your own research is invaluable even if you do end up heading the same direction as the herd at least you will understand why you did, and be able to recognize and make adjustments if the climate changes.

"I don't try to jump over seven-foot bars; I look around for one-foot bars that I can step over."

Many new real estate investors think they have to find properties for 60% of their market value to be successful. Deals like that do come around, but they aren't that common (at least they certainly aren't that common in the areas in Canada where we invest!).

Quite frankly, if you wait for deals like that you could be sitting around trying to be a real estate investor for years. Instead, focus on finding a good area to invest in and then find a good solid property that will be easy to attract tenants to. Over time you will find that you make a lot of money from cash flow, mortgage pay down and property appreciation from that one simple deal. And if you keep doing that... finding one foot bars to step over instead of waiting until you find a seven foot bar you can leap over, you'll build your wealth steadily and successfully over time.

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