The journey that a real estate investor goes through as they evolve is filled with both excitement and disappointment. Through the experience that you gain, you become a different person. I believe that your perspective changes on the topics of money, business, and risk, to name just a few. My perspective on life has definitely changed when I look back upon my experience as a real estate investor.
The question can be asked: What is the biggest change that takes place with an individual? It is tough to say, as I believe this change differs with each and every individual. I have seen people change for the better and for the worse as they have ‘evolved’. I have seen some people’s egos inflate, and at the same time I have witnessed people become more humble and grounded as they continued to obtain more experience as a real estate investor.
In this article I am going to outline some of the significant stages that I believe a real estate investor goes through. I have gone thorough all of these stages myself.
The First Stage
Real Estate Does Not Exist
I believe that all real estate investors start off at this point. No matter what an individual’s life experiences are, there is a point in time in a real estate investor’s life in which they are not interested in real estate and frankly; they do not know that real estate exists. When I say that, ‘they do not know what real estate exists’, I mean that they are oblivious to it. Of course they know that houses, apartment buildings, and shopping malls are physical structures, however, they are indifferent to these structures, and they do not see these structures as assets, nor is there any appeal whatsoever.
If a person grows up in a family of real estate investors, then obviously they are exposed to real estate investment at an early age. Often people who grow up in a real estate investment family become investors themselves. However, when they are young, there is a time in which they do not know what real estate is.
The minority of the population are real estate investors. As such, most people grow up not knowing anything about real estate, or the benefits of owning real estate investments. These people grow up and are socialized in a certain way. Perhaps they are conditioned to believe that going to college or university is the appropriate and responsible thing to do. As a result, they grow up, go to school, graduate from college or university, and end up getting a job in their field of interest. There is absolutely nothing wrong with this, as this is the normal course of life for a lot of people.
Alternatively, perhaps an individual is taught from a young age that going to school and then studying a trade is the right way to go. So they do exactly that. A very good living can be made by working in the trades, so there is nothing wrong at all with this course of action either.
Real Estate Investors can have any educational background at all. In fact, real estate investors can have absolutely no academic educational background and still be very successful as an investor. There is however a common characteristic that I have noticed with these stage one investors. This common characteristic is motivation. These people who are in the first stage want to achieve more in life than what they are currently achieving. They have motivation, and they want to move forward in life.
The Second Stage
Something happens with real estate
As a real estate investor evolves, in the second stage, something happens with real estate. There can be a variety of occurrences that happen to the investor here. I will share with you what happened with real estate in my life.
I was in stage one probably for the first 23 years of my life. During these years, I did not know that real estate existed. I did not even consider the benefits of owning real estate as an investment. I went to school, did very well through high school, and off to University I went. I graduated from University with a Psychology degree started working for one of Canada’s largest banks. It wasn’t until something happened with real estate that got my attention. Here is what happened:
About 7 years ago a long time family friend that lived close by to us put a down payment on a townhouse located in our town. They had plans of downsizing by selling their much larger house. The townhouse that they bought was brand new and it was yet to be constructed. Over the next year, as the townhouse was being constructed, they continued to live in their existing house. This all was happening as the real estate market was booming. As a result, the value of the townhouse that they had put a down payment on was continuing to climb month after month. The townhouse was located in a new area of town, where there were a lot of young families moving and a lot of new homes being constructed. After the year was up, they sold their existing larger home, and moved into the townhouse. They spent 2 years in the townhouse and then sold it and moved to St. Lucia where they bought another house.
Sitting on the sidelines, I watched this all happen before me, and I saw that they made $120,000 in 3 years. They bought the townhouse initially for $200,000 and ended up selling it for $320,000 after 3 years. Not taking into account any realtor, legal, or admin fees, their gross profit was $120,000 in 3 years. Not bad at all! Like I said, I sat on the sidelines and watched this happen. Clearly, something interesting was happening, and I was taking note of it.
The Evolution of a Real Estate Investor – Part Two
The Evolution of a Real Estate Investor – Part Three
