By Deborah Gordon is a real estateinvestment specialist at Invest Arizona
o you are looking for investmentreal estate? If you haven’t already
discovered, you are about to nd
out that there is no shortage of ways to in-
vest in real estate. There is no shortage of
methods to use. Should I go about invest-ing this way? Should I use this person’ssystem, or should I hire someone to do thework for me?
The laundry list of fac
-tors to consider when in-vesting in real estate seemsendless. But one of the waysyou can cut this list down tosize is to identify the typeof investor you are.Each of us havea differenttempera-ment anda style of decisionmaking.Often times this is the difference be-tween a successful investment and a com- plete disaster.
One of the rst things you should iden
-tify about yourself and your personality iswhether or not you are a “passive” or an“active” investor. Knowing the answer tothis will help you sort out the opportuni-ties best suited for you.I’ve provided a little quiz to help youidentify the type of investor you are andwhat type of investment opportunitiesyou should be looking for.How do you change the oil in your car?Do you A) do it yourself, or B) take it toa shop?If you were to play the stock marketwould you A) look for a strong mutualfund, or B) look for an individual stock that you think has the potential to sky-rocket?What are your investment goals? Doyou want to A) slowly build a stronglong-term investment, or are looking toB) maximize your return as soon as pos-sible?
Do you, A) prefer to nd professionals
and rely on their advice, or do you B) en- joy learning and becoming an expert?What type of property are you lookingfor? A) One that needs little attention atall, or B) one that needs a lot of work?If you consistently chose the letter B,you might be what we consider an ActiveInvestor. An active investor isn’t intimi-dated by much. What the average personmight see as a dilapidated money-pit, theactive investor sees an opportunity to turna little cash and some elbow-grease into a
mini “Taj Mahal”.The active investor sees somethingsexy in turning that xer-upper into a
quick 10%, 20% or even 30 % return. Butthe truth is, being an active investor isn’teasy. On top of the money it takes to buythe right property, it takes a great dealof time, energy and expertise to be successful. Knowing whatto buy, when to buy, andhow much to pay is onlythe beginning. You stillhave to choose what andhow to rehab. Howmuch you willdo on your own. Whatcontrac-tors will be hiredto do what youwon’t or can’t.
This takes an awful lot of effort. The
streets to prosperity are littered with theremains of those who bit off more thanthey could chew. If you don’t believeme, just take a look at how many books,videos or educational products you can
buy all designed to teach you how to ip
houses, perform renovations or marketyour property.
Being an active investor is denitely a
worthwhile pursuit if you have the time,energy and resources to develop the prop-er expertise.Back to our quiz. If you consistentlychose the letter A, you are probably whatwe would call a passive investor. A pas-sive investor is motivated by a completely
different set of values. The passive inves
-tor may see the opportunities in real es-tate, but prefers to leverage the time, ex- pertise, and resources of a professionalteam/organization.It isn’t that the passive investor is not
capable of ipping houses, or hiring con
-tractors or marketing properties.Let me be clear. It’s not my intention to paint one type of investor as more idealthan the other. Rather, the passive inves-tor has a different perception of the valueof their time. He or she may not have thetime to devote to the process. Or, theymay have the time, but feel that being adecision maker about the investment is amuch more valuable use of their time than
What Typeof Investor
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funds, gold, other securities and commodities and/or real estate, seek the advisement of a trusted nancial ad
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Continued on pg. 7
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