I’m in Las Vegas and came to a realization. I had to stop what I was doing and come upstairs to write, right away. I was playing a dice game called craps and the first throw of the dice gave me a big win. The shot of endorphins my physiology gave me felt great. It’s the high that winners get and it feels so good.
“Real Estate is Just Gambling“
Know any friends or relatives who have ever said that? These are the same people who, if they have investments, put all their investments into stocks and trust a stock broker to do the right thing for them. When the market is down, the stock broker blames the market. When it’s up, the broker’s suddenly a genius. These friends and family will tell you that you are risking your hard-earned money and you are gambling on ‘the next new thing’ and you’re just risking it all on what’s merely a game to you. They tell you they’d rather go to Vegas and put $100 on a slot machine pull; at least it’s less than the $100,000 you’re risking.
You’re never going to change their mind. Don’t try. Just kindly tell them about your success the next time you make a good deal in your real estate career. Their still stuck in the stock matrix. You can’t pull their plug until they are ready. If those guys ever invested in real estate, they would be unprepared, and buy some shiny new overpriced object, hoping for the market to go up, and it would be just gambling.
Back to the Craps Table
Just like everyone else who gambles, I get a nice feeling the rare times I win. I get a similar feeling when I close a great deal in real estate. What’s different is that feeling is much bigger than any Vegas win I’ve eve had. I don’t consider myself a gambler, but I do gamble from time to time. I never lose big and I never win big. That’s because I rarely play, and I rarely play with big money. When I have a success in real estate, it’s not winning, though. It’s the results of months or years of planning, contracting with vendors, reporting to investors, dealing with problems, dealing with a seller, dealing with a buyer, dealing with governments, and the list goes on.
As I was throwing the dice I realized that the great feeling of a win never lasts. A few rolls later and I was back to where I started and the faded feeling was finally gone. The difference between these things is twofold: In real estate I can take much time to plan, and the success is one of making money for others, helping others find homes, and a financial success for me. The bonus is that I learn more about what I’m doing each time.
I don’t have that with gambling. It’s true that there are players out there who have taken the time to learn strategies like counting cards. While frowned-upon, this strategy is not cheating. These people dedicate large amounts of time to learning how to best play. They can increase their probability of winning a few points and they look at gambling as a profession. While I don’t buy that gambling is a good career, I know of some who have managed to do so. To get to that point takes years of education, practice, and effort. Many ups and downs and risk of getting thrown out of casinos forever. Maybe that guy is not gambling any more. I’m happy for him.
How to Gamble in Real Estate
By now, you should know that this is slightly tongue-in-cheek. You shouldn’t gamble in real estate, but you shouldn’t run away from it. If this is the area you choose to invest, be like the card counter, educate yourself and practice. If you still want to gamble, here are some ways:
- Don’t take the time to learn about real estate. Just jump right in and buy something.
- Don’t save up money before buying. You can use all your emergency money right now.
- Buy the thing that your gut ‘feels’ is right.
- Don’t evaluate deals. Spreadsheets are for nerds. You know better anyway.
- Quit right away when you have one loss.
- Listen to others that either tell you of some fantastic too-good-to-be-true investment strategy.
- Listen to others who tell you to never invest.
Let me know which ones you’ve experienced you’d like to add to this list. Don’t do anything on this list. Keep reading, evaluating deals, setting your goals, and you’ll be a real estate investor – not a real estate gambler, sooner than you think.