There are four basic types of real estate investors. Let’s see which one suits you the most.
Safe investors own their own homes. Little by little, month after month, they made their first month’s mortgage payment and now they are sitting in a very fine nest of eggs. They have not put aside the idea of investing in property, but they are very uncomfortable using their home to guarantee another mortgage. For them, the risks will usually outweigh the benefits, and they won’t get into the game unless the chance is a virtual slam-dunk. Besides, they have to think about their retirement.
Moderate investors often own one or two additional properties as well as their home. They like to take small, educated steps. To them, their investment seemed lackluster. The grass is always greener in the agreement of others. But again, they have very safe properties in a very mature and stable area. There is not much growth in value from year to year and rental prices are also quite calm. But if they decide to sell, they know they’ll at least get back what they put in the property.
Risk takers put the possibilities ahead of potential drawbacks. For them, money is a means to something better than an end in itself. In balance, they make more deals, and more profitable, than moderate investors do. They see every transaction from every angle and can discern hidden values in some properties, and hidden dangers in others.
Real estate investing is full of time eating, sleeping, and drinking. When they don’t make deals for themselves, they do it for friends. Unlike some people, who never see information opportunities , strange people see so much that they should avoid bumping into them. Investment freaks tend to have a solid foundation in real estate and act fast. Their view is that they have nothing to lose to gain.
It is easy to see that these four niches are occupied by different personality types: cautious, contented, courageous, fearless. However, instead of four different types of people, you can view them as four levels of real estate investing that people can skip, from one to four, as they develop their skills.
I’m not saying that everyone goes through these four levels, but as you develop as a real estate investor, these are the levels that you will pass.