Reading Robert Kiyosaki's Rich Dad, Poor Dad book series on real estate investing is enough to make anybody chomp at the bit to get started. These books make it seem just that easy. Kiyosaki would be delighted, of course. That's what he and similar authors want—for their readers to feel as if they can do anything. That means they've given a very good pep talk.
And while they are right in a way—anyone CAN learn to invest in Minnesota real estate—there are some things that a novice real estate investor may not understand right off the bat. For one thing, what seems to work out smoothly in the black-and-white pages of a book has a few more hitches when you apply it to real life.
Kiyosaki's books teach his readers “just enough to be dangerous.” If they get out there and start the real estate investing game, they will be heading for the first hurdle of investing at an alarmingly fast rate. If it doesn't shake them too bad, then they might just have a chance at becoming a real investor. That first hurdle, the hurdle which can throw a novice right out of the saddle is this: Learning he's got a lot more learning to do.
See, Kiyosaki's books provide the reader with an overall framework. It's kind of like explaining to someone the technicalities of staying on a wild horse. It may sound easy in theory, but the first time that horse actually jumps with the novice on his back, that novice learns quickly that life and theory are two separate things.
However, if he can hold on tight, he's got a chance to ride that thing till it's tired.
Rich Dad adviser Ken McElroy, who authored the book “The ABCs of Investing,” sets forth a layered method of research, which gets the investor to carry out a broad search of the markets he might like to dip his toe into. In other words, he determines which area of the country, and then which city, in which he would like to look for properties. It is important, McElroy writes, to know which criteria to use in order to determine what makes a desirable market.
Criteria for choosing you city is all about the economy. Are big corporations moving in, or are businessmen closing up shop? Are people moving in by the truckloads or fleeing in droves? The smart investor puts his money where the people are and where they want to be.
After that, McElroy advises, visit the city. Before his visit, the smart investor makes sure he will have appointments with local Minnesota realty experts. While he meets with those experts, he will evaluate them for a possible place on his team. Putting together that team of experts is a step that should not be skipped at any cost, yet the novice often does skip this step. The experiences the novice may have as a result is often enough to put him off real estate investing forever, because skimping on your team can be very, very costly.
The first list of experts the investor speaks to in the city will introduce him to the next list, who will lead him to more, and so on. He will meet local business owners and government officials who will give him even more information on the city. Because he took the time to learn how to read financial documents, and learn the basics of real estate law, he will be able to ask intelligent question and to know when someone isn't being quite up front. He will know what documents to ask for in order to prove or disprove the grand statements that people are giving him.
If the novice real estate investor enjoys this investigative approach to things, and loves the fact that the work he does in the beginning gains him knowledge which prepares him for digging up even more knowledge and then more, then he will become a good investor.
Anyone planning to skimp on the work of Minnesota real estate investing is planning to fail.