These days, you don't even have to
venture off the couch to be enticed into investing in
Whether it's a fabulous success story
on TV's "Flip That House," blue-sky testimonials
on some infomercial or your cousin phoning to brag about
her latest score, someone always made a fortune without
plunking down a red cent -- unless, of course, you count
the cold cash paid to learn "the secret."
But "follow the herd" isn't
necessarily the best move for a real estate investor,
says Elaine Worzala, professor of real estate at the
University of San Diego's Burnham-Moores Center for
Real Estate. "Just because your cousin's [investing]
in a particular area doesn't mean you need to."
What about when it's not only your cousin
but your cousin's cousin? At last count, The National
Real Estate Investors Association, or REIA,
had more than 37,000 members across the U.S., in at
least 271 local associations and investment clubs. In
the boom market of the past few years, the association
experienced a huge jump in members, says Rebecca McClain,
executive director of REIA.
REIA groups provide an overview of the
business and give members a chance to learn from one
another. "The education you get from the front
of the room is important, but the education you get
from the guy sitting next to you is more important --
because he will tell you his horror stories," McClain
As the market apparently does a flip,
with higher interest rates, lower prices and longer
stretches of time between "list" and "sell,"
a greater majority of those who have joined the real
estate party line may well be in for a scare. "We
happened to have a nice run over the last 10 years,"
Worzala says. "But properties go up and down --
it's a very cyclical industry."
Accordingly, real estate investment strategies
are also bound to change.
Patience is a virtue
Patience in finding profit opportunities will become
ever-crucial, experts say.
"The most important thing is to set a realistic
goal of how you want to invest," says real estate
broker Mark B. Weiss, author of five books, including
"Real Estate Flipping: Grow Rich Buying and Selling
Weiss compares the process of finding an investment
property to a fisherman waiting for his catch. "Sometimes
you put the hook in the water and that fish will bite
immediately. Sometimes it takes two days," he says.
"People who are impatient -- spending money on
books, CDs and tapes and falling into the seduction
that, 'It's so easy, everyone's doing it' -- are people
who won't be successful for the most part."
Can novices make a worthwhile catch in any kind of
"Yes, if they know what they're doing," says
Lisa Moren, author of "Real Estate Investing for
the Utterly Confused," an update on a seminar course
she has been teaching for years. "I believe in
real estate. I've bought property when interest rates
were in double digits, and I've bought when interest
rates were at a 40-year low."
But novices should avoid a relatively sinking market,
says Moren, also marketing director of Entrust
Administration Inc., a provider of self-directed
retirement plans for which plan members can invest in
nontraditional assets like real estate.
"Wait until it totally tanks,"