> ## Content Index > Fetch the complete content index at: https://www.smdp.com/llms.txt > Use this file to discover other available public pages before exploring further. # It takes time to make money - URL: https://www.smdp.com/it-takes-time-to-make-money/ - Published: 2008-09-10T15:00:00.000Z - Updated: 2026-10-25T00:58:46.000Z - Author: Guest Author - Tags: Opinion, Santa Monica, #archive-import ABOUT ONCE A MONTH, I GET A CALL from a novice borrower who wants to know the secret to real estate investing success. People think you can go and buy a house with 100 percent financing with the seller carrying paper for the entire amount. Translated, that means the seller would grant the deed to the buyer and the buyer would make monthly payments to the seller. The buyer thinks this is good for the seller because the seller gets monthly payments, while the buyer gets control and ownership of the property. The flawed thinking, which many buyers tend to forget, is that they have no real capital interest in the property. What is going to stop the buyer from walking away from the property when things get tough or a tenant cannot be found? What if the buyer lives in the property, losses their job and can no longer pay the mortgage? The answer is nothing at all. The seller is going to want the buyer to have a monetary stake in the property, or what people like to call skin in the game. Talking to hundreds of investors over the years, I have learned that some things hold true for real estate success. Have you ever stayed up until 2 a.m. watching TV and come across infomercials for real estate success programs? Usually the infomercial is selling a get rich through real estate program. Some of the real estate programs have useful information; however, many are just selling systems that were made by salesmen, not true real estate investors. At the end of the day, real estate success and experience is gained over the course of years. Unfortunately, there is no way to become successful from real estate investing overnight. Three tools that are needed to become successful in real estate investing are time, money and creativity. Time can correct most real estate mistakes. It may take years or decades, but most real estate mistakes can be corrected given enough time. However, time is a variable that any novice real estate investor must give him or herself. To become a successful real estate investor you need to learn the fundamentals, and the only way to learn is to dedicate time to the craft of real estate investing. During the process of learning, make sure you read about real estate mistakes, as the expensive mistakes of others can be far more valuable than the success stories. It is rare for someone to talk about their real estate mistakes, but when an experienced, successful real estate investor does — pay attention. The old saying “you need money to make money” holds true in real estate more so today than it has in the past. With the constant shifting of the financing environment and the recent announcement of the government takeover of Fannie Mae and Freddie Mac, it has become crucial to have money on hand to purchase, repair and hold real estate. Gone are the days of easy money. Why do you need money you ask? Capital is needed to run properties from day to day for repairs such as leaky roofs, broken stairs, etc. Not to mention monthly expenses such as utilities, property taxes and property insurance. Without sufficient capital reserves, even the best real estate deal can turn into a nightmare. One thing that surprised me about real estate investing was the creativity needed to succeed. Real estate is a people business, whether it is dealing with a banker, contractor or tenant, you need to have good people skills, such as communication. People are people and tend to have an objective. Sometimes people will be less than honest, but for the most part, a win/win solution . The difficult part about reaching a win/win solution is often the creativity in thinking of it. For example, one of my borrowers wanted to renovate a unit, but the tenant refused to take the relocation fee because they would have to move and did not want to deal with it. It was not the cost of moving that bothered the tenant, but the actual move itself. The owner offered to hire movers, even setup everything so all the tenant had to do was box their items up. The owner also gave the tenant a relocation fee. The tenant was surprised and happy that he did not have to carry boxes down two flights of stairs. The owner renovated the unit and yielded a $700 monthly rent premium over the old rent. In the end, the tenant and the owner were happy and a win/win solution was reached. Sometimes it is not money that is the motivating factor of party you are dealing with. Finding the motivation and using creativity are important in negotiating a win/win solution. It takes more than a wish and a dream to become a successful real estate investor. Remember real estate investing success does not happen overnight and no investor has ever learned it all, but if you put in the time, put up the money and use your creativity, you can find yourself on the way to real estate investing success. MIKE HEAYN is a Washington Mutual Multi- Family Loan Consultant. He (310) 428-1342, or e-mailed at *Originally published in the Santa Monica Daily Press print edition on September 10, 2008.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/091008.pdf?ref=smdp.com)