Succeeding as a real estate investor is often as much about knowing what not to do as it is about knowing what to do. Still with me? Educating yourself on the pitfalls of real estate investing is as equally important as knowing how to succeed. In fact, the two are one in the same. It’s no secret that some of the worst real estate investing pitfalls can be very, very expensive. Simply avoiding a costly mistake is all you may need to go from a bad deal to a great one. Subsequently, if there is a way to mitigate potential risks, you need to everything you can to increase your chances of success. Knowledge is power. You need to educate yourself as much as possible to mitigate risk. Only then will you realize true success.
Having said that, you need to ask yourself what it is that may be holding you back from realizing your full potential. Some of the obvious blunders might include:
- Buying houses that require more work and money than investors have
- Failing to complete thorough due diligence on repairs, title and liens
- Foregoing insurances
- Attempting DIY projects that are way beyond personal skill level
- Failing to verify values and demand
- Not ensuring refinancing will be possible later when purchasing homes for cash
- Getting into negative cash flow situations
- Generally failing to do all the math on buying, fixing and renting or selling
There are far too many potential issues to list. Thankfully, most of them can be avoided, and skillfully side stepped with a good, comprehensive real estate investment course. Essentially, anything you can do to further your real estate investing education is a good career choice. However, there is once factor that can prevent even a good education from helping you: failure to launch. If you don’t even start, real estate will lead you nowhere.
If you analyze the numbers correctly and “buy right,” it is hard to lose in real estate. Of course, you may not always make near what you hoped, but most net losses can be avoided with intelligent acquisitions. Yet, those that never try and never buy will never have the chance to win and succeed. In fact, they are 100% guaranteed not to make a dollar.
So with odds like that, why do so many fail to take action? Why would anyone just doom themselves to never getting ahead, enjoying the income, wealth, tax, security, and other benefits of real estate investing? I will tell you: fear, confusion, too many steps, self-doubt, and common excuses like needing more money.
So how can more would-be investors and success stories overcome these self-defeating illusions and misconceptions?
Kick all the uncertainty to the curb and gain confidence through a good real estate education course. Refuse to take the thrift store approach. It is never a good idea to skimp on your education, as it will serve as the foundation of your business. When it comes to real estate education, you almost invariably get what you pay for. Consider the downside of poor and incorrect information. It’s not just a nightmare waiting to happen, it can make it impossible to really get going, and make it through your first deal.
Many try to kick off the rust and get started, but realize there are more steps than they thought. They send out mailers, and then panic because the never learned what to do when people start calling, or when people say yes to offers. This scares more into paralysis than you can imagine.
Fortunately, there is a solution. Know what you’ll do next and what a full transaction should look like. Real estate coaching and mentoring can make a massive difference. Imagine someone walking you through your entire first deal. It’s a huge boost to your confidence, and understanding of entire process. Then it’s easy to take the training wheels off and starting to pull your own stunts.
Without question, money is the largest issue new investors come across. Obviously, if you didn’t need or want the money you might not be looking into real estate investing in the first place. More money can appear to make things easier in the short term. However, it is certainly not always necessary. In fact, when it comes to starting any type of business, the data shows more money is definitely not always a good thing. Besides, the smartest and most successful property investors don’t use their own money anymore. Even if they didn’t get started with no money down deals, they have quickly found leverage, better negotiating, partnerships and JVs the way to go.
A proper education will greatly reduce the fear and doubt any investor may have. Equipped with the right tools, investors will have confidence in their ability to make smart investment choices. The key is action and moving forward. Step forward. Take small steps every day, and give yourself deadlines for making your first offer, and closing your first deal.
