What’s the hardest thing about real estate investing? I’m sure it depends on who you talk to. At this point in my journey, I’m a bit scared of everything to do with real estate investing, however, I’ve never done it, so maybe my fear is unwarranted. Isn’t there a saying out there that describes fear as an acronym?

F – False
E – Evidence
A – Appearing
R – Real

This is my hope, the false evidence about owning investment property (in my head) is appearing real. I always told my kids, “Feel the fear and do it anyway, you may just find it’s not as bad as you think it is in your head!” Now it’s time for me to live up to those words. There’s a lot of fear in buying that first piece of real estate. You know, I’m not as young as I used to be and there’s just not as much time to recover from my stupidity. And believe me, my high tolerance for financial risk has caused us (yes, I’ve drug my poor loving hubby way past his risk tolerance) to start over more than once. You think I would learn, right? Well, I think I have. My tolerance for risk is no longer high, in fact, I’m starting to get down-right tight with my money.

So, here I am learning about real estate investing and after making offers on two houses that fell through, I’m starting to question if I’m doing the right thing. We have the money in the bank and it’s allocated for purchasing a rent house, but I keep thinking, what if we need it? What if something happens?

Well, last year, something happened alright. We had all our money in IRAs and 401Ks when something definitely happened. In the span of just a few months all the money we had saved disintegrated by 40%. And the more I listened to the rhetoric, the more I continued to do the same as before. Actually, I honestly thought we were doing the right thing by listening to financial planners and radio financial pundits.

“Hold the course.”
“Keep doing what you’re doing.”
“You’re doing the right thing, the market will bounce back.”
And don’t you love this one, “Stocks are on SALE!”

It wore on me, I do not like seeing my age get older while my bank account gets smaller. It didn’t take too long to figure out that we were doing something wrong and started looking for an alternate way to invest. Once I realized that there is a better place to put my money I immediately changed my 401K contribution from 10% to 4% (gotta get the match, right?). Also, started watching our budget a bit and were able to put more than I ever thought possible in a liquid savings for future real estate investments and reserves. It’s amazing how quickly you can build your reserves when you have a plan and know what you want to do with your money.

Now I just need to tackle the fear. I’m starting to get my mind wrapped around the whole concept of cash-flow and capital gains. I’ve gotten good at locating deals on the MLS. We’ve even make a couple of offers (that we didn’t get). Now we just need to continue to take action.

Action will replace fear.

Until next time…

Reba