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This chapter is from the book

Risk and Reward

I don’t want to conclude this chapter without mentioning risk.

Risk in real estate is real. However, you can learn to manage many of the risks you will face. As a matter of fact, if you ask entrepreneurs in any industry, most will say they are risk averse. They are able to get others to share the risks and thus minimize their own exposure. We examine how they do so in more detail in later chapters.

So the risks are real, but so are the rewards. Real estate can be a great field—the best of all fields, as almost any real estate entrepreneur will tell you. (Today, you won’t hear many doctors or lawyers saying the same thing about their fields.) Real estate can be rewarding not just from a creative or financial standpoint, but also from a personal standpoint: You will meet and interact with many fascinating people.

It can also be rewarding from a social, even societal, standpoint: You can reshape the physical fabric of a community. Not all entrepreneurs are motivated primarily by the prospect of financial gain—many like building, and later, seeing what they’ve built.

With this picture of risk and reward in mind, you have to decide if this is the field for you. Think about what you’ve read so far. This is a field with a lot of moving parts. To balance and manage all these parts requires a great deal of patience, persistence, and skill. You never know for sure when to pull the trigger and actually commit to go ahead on your first deal. If it works, you’ll never really know whether you were smart or just lucky—in the right place at the right time.

If your first deal turns out to be something other than the great success you had hoped for, do you change course and focus on your day job? Or, do you regroup and decide that you have learned from your first real estate experience and have made contacts and relationships that will help you get it right the second time? (Most entrepreneurs don’t get it right the first time.) When do you jump out of your day job nest and start your own business? Have you built a reputation where people trust you and are willing to do business with you? Again, there are no easy or right or wrong answers.

Maybe the bottom-line question is this: Have you caught the bug? Has real estate gotten under your skin and made any other career choice look dull and unappealing? If so, it’s highly unlikely that you’ll stop now. Instead, you’re likely to start thinking about scaling up: The subject of Part II of this book.

But first, let’s meet some people who are just starting out. Let’s see how they gain experience, establish good work habits, take the plunge, and do their first deal.

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