Industry News

Are You Really a Real Estate Investor?

(THE BIGGER POCKETS) - At a small lunchtime gathering of real estate investors last week someone made an interesting comment. The conversation had turned to the topic of wholesaling and then rehabbing and flipping properties. The comment was very simple on the surface – if you didn’t actually hold on to properties were you an investor, or did you merely have a real estate business?

A Real Estate Business

If someone says they have a real estate business you think of mortgage brokers, real estate agents, title people and the like. Their business is obviously centered around real estate transactions in some way. A wholesaler who places properties under contract and then assigns the contract to the end buyer also has a business based on transactions. Someone who acquires properties to rehab and flip is also in a transactional business. The length of time involved is significantly longer but it still isn’t investing.

The point that was being made is that a real estate business, like any other business, has to be tended to constantly. As soon as the transaction, sale, loan, or project is completed you need to do it again. Much like a job, you are trading money for time and working for your money. If you don’t have another transaction lined up you are out of business.

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