The American Education Institute

Did you ever do this?  Did you ever go into an antique shop, for instance, or attend a garage sale and “discover” an heirloom so valuable or appealing that you can hardly believe it’s actually for sale?  Do you almost feel it should be priced higher, or that you even feel a little “guilty” for buying it?  Well, that may be a nice experience for a shopping trip, but this is a terrible attitude to have for investing in real estate.

If you are in this for making a profit or to achieve yur long-term financial goals, you cannot afford ever to become emotionally involved with a vintage home, or fall in love with what you think is an heirloom house.  If you’re being to be successful in real estate, you are going to have to be as detached and aloof as that antique seller who’s willing to part with someone else’s grandfather’s gold watch.

That watch, like every real estate property you look at, must be valued in terms of dollars and cents.  Most likely that antique dealer obtained the watch for a fraction of what he wants to charge you for it.  You need to do the same.  You need to buy properties for less than what somebody else is willing to pay, and turn around and lease them or sell them for the maximum amount that the market will bear.  If you have enrolled in a real estate course to help you possess your “dream home,” you are probably taking the wrong course.  You cannot afford emotional involvement in any of this!

Your most important guiding principle for survival and success in real estate is cash flow:  Buy, improve, mkarket or lease, and pay all the monthly bills for less than the property is earning for you.  If the property starts costing you more each month than you bring in, you most likely need to sell off that property–no matter how appealing it is to you to keep it in your possession.

Typically, the role of amotion with most property buyers decreases as the total price increases.  Most people can remain detached from a multimillion dollar office building fairly easily.  Buy when they are looking at a sweet home in a nice neighborhood priced at, or above, the prevailing market, it becomes increasingly more difficult to stay aloof.  The tendency for most people is to view such a home in terms of their own living in it.  If it’s decorated right, well maintained, and has neighbors most people would welcome living next door, emotionally they could be prepared to pay more than it’s worth.  Remember this when you sell, but forget about it when you buy.

In my text entitled 100% Financing When Buying Real Estate the student learns how to buy somebody else’s grandfather’s antique pocket watch.  In terms of real estate, you will learn to keep your emotions out of your purchases altogether and buy based only on what the property is worth in terms of its market value–all by itself and within a completely uncaring marketplace that pays no attention to your particular family history.  Always think of real estate as a commodity, never as someplace where you yourself would like to live.

Dr. Eric T. Martin / 100% Financing When Buying Real Estate / 6-7-09