Recently I have noticed an abundance of get rich with real estate ads in my email box and banners littering the Internet. While researching one in particular I found some information that disturbed me. I attended a web seminar hosted by NAWREI (national association of women real estate investors), listened to the presentation and viewed the PowerPoint presentation included. Through out the entire presentation, words like accumulating wealth, cash flow quadrant, investor and financial freedom were thrown around. All of these seemed on the surface to advocate financial education. This presentation insisted that the way to financial freedom was to invest in real estate property in growing areas in properties that held instant equity and gained in value over the next twenty years. However, I noticed that each investment property offered by this organization broke the cardinal rule of real estate investing.
It lost money every month.
When investing remember that the key to accumulating wealth is to buy assets.
The simplest definition of an asset is something that you own which puts money IN your pocket every month without you having to physically work for it and with out you having to give up ownership of the asset. A liability, takes money OUT of your pocket.
Take care not to fall prey to sales people claiming to be investors. Make your money in real estate when you buy. Not in equity, but spendable cash flow. In order for the investment to help you reach financial freedom, the income from the investment should produce cash flow(spendable money) after paying all of the expenses associated with the investment. An investment that requires you to take money out of your pocket every month and wait for the value to go up in order to get your money back is utilizing the "buy hold and pray method" of investing also known as speculation. This method of investing creates liabilities and requires the investor to buy the investment , hold on to it (while continuing to loose money) and pray that the investment will go up in value so that the investor can get his/her money back.
Don't let sales people smooth talk you into loosing money for the sake of investing. Continue to get educated and remember the cardinal rule "investments put money in your pocket".
Happy Investing
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I was researching NAWREI (after the fact) and your comment is the only one I found. We joined NAWERI in the Spring (on advice of a friend who has purchased Florida Kay Club property). We were inticed by the Tennessee project and purchased 2 homes. The first one is about 30 days from completion so I started to research the market for resale. To my shock, the house will probably sell for $10k less that what we will owe. With the cost of selling we will be in the hole by about $20k. What do you know about the NAWREI group? Do we have any options since we have not closed on the final loan? How does NAWREI make their money? I feel like everyone got a piece of the pie and we are left holding the bag (empty)!!!
Thank you.
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