As a general rule, real estate investing is an excellent way to build a solid financial foundation and get out of debt.

But -- you have to do it under the right circumstances, and for the right reasons.

One of the most common scenarios that I see among the new and inexperienced, who have gotten themselves into big trouble with real estate investing, is jumping into a deal that they don’t understand, in hopes of earning a chunk of money quickly so that they can pay off existing personal debts.

Someone along the line gave them the idea that they could solve all their financial problems by jumping into a real estate deal to make quick cash.

If you are desperate for $20,000 and you’re trying to think of a way to come up with it in the next 30 days, you can use real estate as a strategy, but you should be willing to get advice or consult with an independent professional who can give your deal an honest evaluation that is in your best interest.

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Many folks get into deals that they barely understand and wind up in a worse financial situation than they had to begin with. I recently counseled with a young man who had excellent credit, documented income and had a "friend" who is an appraiser. The friend approached the young man and said, " I can set you up with some good real estate deals, I’ve got the connections in the business, we can make some big money quickly".

So our young investor jumped in, assuming that his friend had everything under control. He also assumed that he was soon to be on the fast track to financial security. He signed paperwork he barely read. He did not understand how the deals were to work, or how the money would actually be made. He committed his credit as the buyer for the properties, while his friend, the appraiser, would be responsible for all the confusing details the young man did not know anything about.

With no legal advice from an attorney, and without consulting with anyone ahead of time, he signed paperwork that was so poorly written and so vaguely worded that I was shocked when I read it. If only he had contacted me first, this never would have happened.

This young man made three critical mistakes.

A: He thought he was going to make easy money because he had "a friend in the business".

B: He committed his credit and signed as the buyer for deals that he did not understand.

C: He failed to get an independent evaluation of the terms of the deal.

Turns out, his friend the appraiser was engaged in a bit of loan fraud. He inflated the appraised value of the property so that the lender loaned more on the properties than they were actually worth, pocketed the extra cash, and left this young man holding the bag on properties worth about $200,000 with loans outstanding of about $300,000.

Now he will have to borrow more money to fix the properties and try to get them sold in order recover as much cash as he can for the lenders. He may still face foreclosure and possibly even bankruptcy.

Given his lack of experience, he should have gotten professional advice first. For the average new investor, who’s never done a deal, who doesn’t understand real estate that well, or has no experience with writing contracts, you should never, ever, in my opinion, engage in any kind of real estate deal, or give cash to anyone, until you have consulted with someone who knows what to do. Someone who can at least give you the benefit of an educated, independent opinion.

Have someone look at the numbers and evaluate your deal appropriately. They can make educated recommendations about what you need to do. Ultimately, you make your own decision about whether or not to invest.

I waited a number of years before I finally got personally involved in a transaction for investment property.

I wanted to be sure that I understood what was going on.

In my early days, I chose to work for other real estate investors either on a freelance, contractor type basis or in a paid position just so that I could learn enough about the business to understand what was going on. I also became a licensed agent.

But I did not get directly involved until I understood what was happening.

Real estate investing is, in my humble opinion, is one of the best ways on the planet to generate and maintain true wealth.

You can generate income, and build assets through appreciation. Houses are shelter and provide an essential human need. A house has a value that goes far beyond the price. You can't live in your stocks. You can't raise your children inside a bank CD. Real estate makes sense for a lot of very fundamental reasons.

You can make $10,000 in a short period of time. I see it done every day. But the people who are doing it know how the deal works, and most importantly, they understand where their profit is coming from and how they will generate it. They also understand what their risks are and what they will do if plan A does not work out and plan B becomes necessary.

It is a fact that over the long term, investing in real estate is a great way to pay down debts, build income and secure your future -- If you buy right and plan well. Get the help you need, do your due diligence, and make sure you understand the terms of the deal.

Donna Robinson is a real estate investor, author, and consultant located in Atlanta Georgia. You may read more of her articles on her website at http://www.realestateinvestorhelp.com/ or you may contact her by email at drobinson@reihelp.com or call 404 542-9903.