Investors are typically classified by either the income they make and/or their net worth. While this is certainly important criteria to measure, we’ve found that your level of experience is an equally important criteria. Without the proper knowledge and experience, “a fool and his money are soon parted”.
Many investors jump into real estate investing without first figuring out what level investor they are and identifying their immediate needs and goals. Similarly many investors, when it comes to real estate, need a combination of time AND money.
Financial
Level 1
Level one investors have few or little assets, do not have enough income to live off of and have no money set aside to invest in real estate and are looking for ways to produce more income.
Level 2
Level two investors produce a sufficient income to live off and have a small amount of money set aside to invest in real estate and are concerned with producing more income as well as growing their “nest egg” substantially.
Level 3
Level three investors have a lot of earned income and/or substantial investable assets and are concerned with generating passive income, creating wealth and reducing their tax liability.
Level 4
Level four investors have enough passive income to cover their expenses.
Experience
Level 1
Level one investors have never purchased a piece of real estate before
Level 2
Level two investors have purchased real estate before but they have been one off deals.
Level 3
Level three investors consider themselves in the real estate business and are actively doing deals.
Level 4
The level four investors’ primary business is real estate. They are actively doing deals each year and their primary income is derived from this business.
Identifying what level investor you are in terms of Financial & Experience is important because it lets you know where you are currently at and also sheds some light on your immediate needs that will help you achieve your longer term goals.
Please share with us below what level investor you are in terms of Financial & Experience and let us know some actions you are taking to get to the next level.