Breaking the Limiting Mindset: Thriving in Real Estate Challenges

Recently, the market has not been perfect for investing in real estate. Many new or want to be investors are stuck out of the game due to higher interest rates. People feel as though none of their deals are penciling out to cash flow and decide to stay out of the game. In this post, I’d like to cover why this might not be the smartest move and what you can do to begin your investing journey.

In a recent post, I wrote about why people believe the real estate strategy BRRRR is dead. Not only do people think this strategy is not possible but a large group of people believe investing as a whole does not work. This is really unfortunate because a lot of these people are just having a limiting mindset that is keeping them from thinking broadly.

The reason many people are choosing to stay out of the market is that deals are not cash flowing. People will run the numbers and will get a negative number or one that is really close to breaking even. Something that I have come to realize is that these people are putting all of their focus on Year 1’s cash flow. This is not the best thing to do because this number will not be the same for the entirety of a person’s career with the property.

Over time, this value will rise. Each year rents will rise to keep up with the market value. Expenses will likely be kept the same or very similar so with each year you are left with more money. More money means that your property is getting a better return and will cash flow. This is why it is not necessarily a bad idea to still purchase real estate in this type of market.

On top of that through investing you will still have the other benefits that come along with real estate investing. You will have loan paydown meaning the balance on your property will be paid off by your tenants over time. You will also have tax benefits to shelter your money that is made. Finally, you will also have appreciation which is the value of your property going up with time.

Investing in real estate is so powerful. This market is tough but it doesn't mean you can’t do great things in it. I’m not telling you to buy a bad deal, but you must have a wider mindset. Think long term and purchase wisely! You’ve got this.