#235 Beginner Real Estate Investing: Don’t Make These Mistakes!

Hey everyone. Hope you've had a great week. We're talking all things real estate investing on this podcast along with mindset and some fun other things to help you on your journey. Whether it's creating income from real estate, whether it's creating a business, whether it's having the right mindset to create your ideal lives, whatever it is, we love talking about it on this podcast. This week we're talking about real estate investing. How it can be a great way for physicians to build passive income, achieve financial freedom, reduce your reliance on clinical work. I understand there can be a lot of fear behind it. We don't want to make a lot of mistakes. So this week we're going to talk about about the common mistakes that lead to costly errors and added stress. You're not going to want to miss these, so stay tuned.

Welcome to the Passive Income MD Podcast where we talk about creating your ideal life through multiple streams of income. If you enjoy hearing about this stuff, make sure to hit subscribe. Now, let's get on with the show.

Okay, hope you've had another great week. Just the last couple months have just been a wild ride with we've had our big conference pimdcon. The market has done some interesting things with the Fed cutting interest rates at the time when I'm recording this, it is a huge political season with the elections coming up. There's so many things to think about and take your attention away. But I just wanna say congrats. Cause you're spending the time right now to talk about real estate, to think about it, how to create your ideal lives, be part of this community. And I just wanna thank you. I know many of you have come up to me and told me how the podcast has made an impact on your journey. And it makes me so humble to understand that, believe that and to hear that. So thank you so much. The goal here is obviously to educate you while you have a short period of time, whether you're in between cases, whether you're in your car listening while you're running or walking the dogs. Let's try to learn one thing that'll help you on your journey. Now, one thing I'll tell you right off the bat, I've made a ton of mistakes when it comes to real estate investing. It's like doing anything else. It's impossible not to make some mistakes. However, can we be smarter about it? Can we make less costly mistakes? It was funny because I was in a group of physician real estate investors, all of them who are extremely successful, whose portfolios I Would basically salivate over. And we all started just sharing our war stories. We started sharing our big mistakes, and we've all made some mistakes. But the cool thing is we all were able to say we learned from that and we were able to move on. And it helped us down the road to make better decisions and get into better deals, especially when the market got better. And I know as physicians during our day jobs, we're in situations where it's really not okay to make mistakes.

I know we try not.

It's impossible not to. We just cannot make mistakes. And so we have to really weigh the risk versus benefit. And we measure twice, cut once type situation. And so we, when we get to real estate, we carry that over. We're so worried about making those mistakes that we don't take action. Well, this is what I want to do today. I want to talk about the beginner mistakes to help you hopefully avoid them, help you save some time, save money, and get you started investing successfully sooner. So to help you, I put together a list of the biggest and most common beginner mistakes to avoid. Let's dig in. Number one, failing to have a plan and not have a clear strategy. Have you ever seen a situation where there's a race and people don't know where the finish line is? I actually. Have you ever seen those races where you have babies or maybe even turtles? Whatever it is, they're all at the starting line and they go. Many have no idea where the finish line is, and they just start crawling all over the place. Some go come backwards, some going the opposite direction. It's fun entertainment for all of us. But if you, you don't have a plan and you don't have a clear strategy of how to get there. It's like you being in that baby race where everybody's just falling over each other, moving in what direction? Somebody might get to the finish line eventually, but most people don't end up getting there. You have to know where you want to be. So you define your investment goals when it comes to real estate. How much are you looking to make? And most people say, I want to make as much as I make right now. And I get it. That makes a lot of sense. That's a great goal. But how much do you really need? What's your budget? What are your expenses? What will impact your life? If you make enough passive income to cut out your nights or to drop you from five days to four days, would that be a huge win for you? So come up with a clear goal that you want to Hit in one year, three year, five year. And you can have those long term passive income goals where you completely replace your clinical income, which is awesome. But it helps to have some shorter term goals that are absolutely clear. I want to make $10,000 of passive income within 5 years. I want to make $10,000 a month in passive within 5 years using real estate investment. That is a very, very clear goal. And when you have that, you can work backwards and reverse engineer your strategy to figure out how to get there. Many of us want to just jump into strategies. Should I do active, should I do syndications, Should I invest in notes? But you got to slow down, you got to know where you're trying to head to first. And I will say that's personal to every person. I don't know what you have in the rest of your portfolio. I don't know your income, I don't know your family situation. So whenever I coach somebody on this, that's where I start. What's the end goal? What are those goals that you're going for? What are those big milestones? And let's get crystal clear on that so we know what direction to run in. Then you can set up your strategy and identify what kind of asset class you want to be in or whether it's active or passive and move in that direction. That helps you get that clear strategy. Now, when you're early on, I understand it can be challenging to find that one strategy that works for you. So I would say just choose one, get clear on it, go all in, learn about it, take action, head in that one direction, see if it works for you. And if it doesn't, course correct, because unexpected scenarios will happen. So you do want to plan for some of that, but it's impossible to predict all of it. But do you have a clear strategy to start with? Again, you don't want to be constantly zigzagging in the wrong direction. This is probably the biggest mistake I see. So if you're out there starting to invest or look into opportunities but you haven't done this first step, in my opinion, this is a big mistake. So start here and get crystal clear.

Hey everyone have a quick question for you. Are you looking for a secure and reliable long term investment strategy? Meet Eckerd Enterprises. It's a family owned and operated firm with over 35 years of experience specializing in US energy and alternative investments. Here at Passive Income MD, you often hear me talk about the need to diversify. One of the safest investment strategies available today are mineral rights. And with Eckerd Enterprises, you can diversify your portfolio. Their team is committed to helping private investors like you and me identify and develop successful diversified portfolios. With an average return on investment of over 24% across their portfolios, the Eckerd team is dedicated to helping you build and protect your wealth through long term passive income. All of this while minimizing the risks associated with traditional investments. So check out Eckerd Enterprises if you want that great investment experience, go to eckerdenterprises.com again, that's eckerdenterprises.com thanks. And back to the show.

Number two, beginners experts. Everyone can fall into this mistake skipping doing the proper due diligence and making emotional decisions. When we buy our primary homes, it's definitely emotional. You see the home, you see the park, you see the amenities in the home and it seems like your dream home or your partner's dream home. And you know it's hard to make a decision based purely on numbers. It is an emotional decision, but that makes sense when you're living there and you're going to enjoy it. But when it comes to investments, again, it's a different vehicle. I like real estate investing, but I like what it gives me much better. So you need to know who you're investing in, why you're investing in it. And the way you figure that out is by doing something called due diligence. You learn how to vet people, sponsors, you learn how to vet the deals, you learn what the risks are in those opportunities. You learn why it might fit your goals and objectives. Back to point number one, to help you get where you want to be. You look at track record, you look at the market, you look at where the winds of change are. All of these are part of doing the due diligence. And in fact, it's the most important step when it comes to real estate. They say you make money when you buy. That goes for whether you're an active real estate investor, where you buy your own properties, or whether you invest in syndications or other people's deals. A lot of the hard work is done up front, making sure you get into the right opportunity. Real estate tends to be illiquid. And what that means, it's not like a stock where you can click on, click out. You're usually on for a longer period of time. And that's the beautiful thing about real estate. When you do give it time, so many great things happen and it grows. We all know that with properties, the price tends to go up over time, but once you're in. You're typically in for a while. So you want to make sure upfront you're making a good decision that makes sense for you and you consider the investment in front of you. You don't want to do this with emotional decision making. You don't want to just get excited and jump into it. I've made this mistake. So I say this knowing that I've done it before too. The market's going crazy. This area seems great. My friend did it and he's done really well with those sponsors. When I look at the mistakes that I made, it's almost always because I made an emotional decision and that carried more importance than doing the proper due diligence. So try to remove the emotional decision as much as possible. One of the ways to do that, by the way, is to have people around you who are looking at these deals with you that have more of an objective look at this. And that's the beauty of being part of a community when you look at these real estate deals.

Hey, what's up everyone? Just want to ask you a quick question. Are you ready to take your medical career beyond the traditional boundaries of medicine and amplify your impact?

Well, I want to tell you about.

The Leverage and Growth Accelerator community.

Just so you know, we created this exclusive community just for physicians like you.

Who want to expand their identities without.

Giving up their doctor identities.

It's an add on, it's not a replacement. When we hosted our first Leverage at Growth Summit, I know many of you.

Have been part of that.

We realized that so many doctors were inspired by the what and why of entrepreneurship, but needed help with the how and when. And that's why we created this community called Leverage a Growth Accelerator to help doctors learn how to start, grow or scale a thriving business and connect with like minded individuals who also want to make a positive contribution to the world. Within this community, you can experience a life of greater fulfillment. It's really a powerful antidote to burnout.

Where you can leverage your medical degree.

For new opportunities and take command of.

Your time and schedule so you can.

Invest in your family's future while enjoying today. In the Leverage and Growth Accelerator, you're going to have access to educational materials, you can have insights from expert speakers, small group coaching, and most importantly, you're going to have community support to help you realize your untapped potential in 2024 and beyond. And we're so confident in the transformative power of this members only community that we're offering the first 30 days for free. If you're interested. I want you to take advantage of this. This window of opportunity is not going to last forever. So go now to lgacommunity.com again that's lgacommunity.com if you're ready to take your medical career to the next level, make a profound impact in the world and do it together with other like minded people. It's time to join us.

We can't wait to see you inside. Here's a third mistake, and this especially goes for when you buy your own properties. It's that you underestimate expenses. Real estate is about cash flow. You want positive cash flow. I've always said the two most important words in investing are cash and flow. That is the money that goes into your pocket at the end of each month. It is the number that allows an investment to float its way through, even in challenges. Positive cash flow means the world because it changes the way you use your time, the way you use your money, the way you live your life. And the way you calculate cash flow is usually income minus expenses. That's not just for investment, that's for your life. You make a certain income and you have a certain amount of expenses and you just want to have more money at the end of the day. If not, you get into debt, you start borrowing things and it becomes a very stressful life. That same thing can go for real estate investments. If you don't properly understand the amount of money that's coming in and then your ongoing costs, your repairs, your maintenance, your property taxes, your insurance, and you underestimate all of that, plus a new roof or new water furnace or H vac system that may come down the line. And I've done all of these things before where I've had a rosy picture. When somebody gave me an investment property and they gave me the financials and numbers, I didn't validate it to the full degree and it all looked good and everything was underestimated. Then it led to a situation where I had a property that was negative cash flow, meaning that it was taking money out of my pocket every month. And that's a scary place to be. The whole point of these investments is to create more freedom, not so that I have to work somewhere else to start funding some of these investments. So underestimating expenses, underestimating costs is a huge challenge, especially early on, because you tend to just believe what other people tell you in terms of the investment. Of course they're going to paint a rosy picture. So it's important for you to trust but verify so as you all know, I think real estate investing is such a great place to start your investment journey. It can seem overwhelming at times, but if you educate yourself, surround yourself with the right people, learn how to do the proper due diligence, that'll set you up for making intelligent investments and ultimately that'll lead to financial success. Again, if you're not sure where to start, and if you'd love to get to a place of confidence where you know how to do the proper due diligence for an investment, where you have a roadmap and a clear strategy to get there, then consider looking at Passive Real estate academy passive realestate academy.com it's our very own course and coaching program that is designed and led by physicians like you to help you create and scale your real estate portfolio step by step. And we do it with you to help you gain the freedom and financial security through passive real estate investments. We have a huge bustling community that is there to support each other. If you think that might add value to you, check it out. I hope by talking about these mistakes, which aren't always easy to do when they're personal, but if it helps you in some way at avoiding unnecessary stress or worry and even worse loss of money, then it's all worth it. Have an awesome week and let's talk again soon.

Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, be sure to hit subscribe. Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. They're more at our website passiveincomemd.

Com.

Thanks again for allowing me to be a part of your journey. See you next time.