The terms “investor” and “entrepreneur” are sometimes used interchangeably, but it’s important to know the difference and to use the terms correctly. Change your language to linguistically change what your subconscious is telling you. For example, when you are an entrepreneur and you call yourself a “real estate investor,” you confuse the marketplace and eventually confuse yourself.
There are several major differences between entrepreneurs and investors, and knowing the differences can help you to figure out your role in the real estate business.
What do you bring to the deal?
An entrepreneur is a person who uses other people’s time, talent, and resources to achieve his vision. Investors bring money to the deals, and entrepreneurs bring deals to the money. If you are looking to buy deals with other people’s money, you are an entrepreneur.
What are your resources?
In multifamily real estate, an entrepreneur’s job is to find deals using other people’s money. When you declare yourself an entrepreneur, nobody expects you to bring cash to the deal. The entrepreneur’s resources are time, talent, and skill. When you claim to be a real estate investor, others expect you to bring cash to the deal.
The benefit of being a real estate entrepreneur
Obviously, multifamily real estate deals need both investors and entrepreneurs to be successful, but being an entrepreneur has one very appealing benefit: control.
As the person controlling the deal, you run the show because providing money is the easy part. The difficult work is finding the gems among the rubble. Once you find them, you control the prize and you get to make the decisions. You get to decide whether to hold apartment deals for wealth, to sell apartments wholesale, or both.
As the member of the deal with the time, talent, and skill, it’s up to you. And by controlling the deals, you can also leverage the deals into considerable wealth.
3 Responses to Real Estate Investor or Entrepreneur?
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I think that was very enlighting knowing the difference between investor and entreprenuer. I think this really helps with mindset.
I am an entreprenuer in residential realestate as a wholesaler. If I can do the same in multifamily and control the deals, I might as well learn how to do these big deals instead.
Excellent description. I am doing lease options on SFRs and use pure options to get the deal with the sellers and then do a lease option with the sellers and buyers. I was trying to think of a way to explain how I work to sellers and now, thanks to Lance, I have the solution!
Thanks for bringing this idea to the foreground.
Andrew