(Cont) Once you get into the project, you realize that not only have you bitten off quite a bit more than you are prepared to chew, both in terms of time and know-how, but you have also wildly overpaid for the house. This thing is going to cost more than you figured… a LOT more. Your budget is broken faster than you can say “needs a new roof.”

Tail between your legs, you admit defeat, sell at a loss, and give up on real estate investing forever, happy just to lick your wounds and trudge happily back to your day job. Let those other suckers lose their shirts, you’ll stick with safer investments like the stock market and pork belly futures, thank you very much.

Real estate investing is dead. Or is it?

The reality is that if real estate investing is dead for many people, people who have lived through experiences just like the one I described above, it’s not really their fault. Oh, sure, they should have done their homework and learned a little something before jumping in, and they bear the responsibility for their own foolishness. I understand that. But I blame the media, primarily TV, but also the internet.

I believe it’s irresponsible to promote any investing philosophy, be it buying stocks or flipping houses, without spending an equal amount of time educating people on the risks and the proper way to avoid them. That’s exactly what the one hour “Flip” shows don’t give you. They give you a healthy dose of five and six-figure profits, but not much in the way of nitty-gritty real life.