Real estate investment always presents itself in the best way. You know, “quick money”, “great wealth”… all that stuff. And while the sane and mature part of us is urgent caution, we may find ourselves at a real estate investing seminar breathlessly offering up our credit card in the back of the room spending money we don’t have to buy a course on how to make a million dollars in real estate.
Do not be sad. These are marketers wielding finely honed weapons of influence. You are supposed to make a rash decision. This is how everything has been designed. However, trouble begins when you continue to make rash decisions outside of the hotel ballroom.
You know, it’s exciting to win $20,000 in a deal, and it’s relatively easy to get those wins once you know how to do it. But to think that it will be easy to start first because a guru who has sold you a course tells you so… it’s a TRAP!
Don’t get me wrong, real estate IS an incredible opportunity to generate cash to become completely debt free and then accumulate substantial wealth, but all in good time. At this time, the fairy dust sprinkled during the seminar has made you a bit confused.
Beginning real estate investors receive a lot of selective advice on how to do it, but little information on the pitfalls to avoid. There are many, but here are the top six:
1) Quit your job:
You may hate your job. You may despise your boss, but when he provides you with the money you need to put food on the table and keep a roof over your head, your job is your best friend. Especially if you have been bitten by the real estate bug and now you are addicted to buying real estate courses. Your work will support your habit.
2) Delusions of first treatment:
If you’re tempted to quit your job, your reason for doing so probably has something to do with all the money you’re sure to be getting soon. There is a softening effect that the pixie dust from the real estate seminar has on your reasoning powers. Entertaining this deception is simply the first sign. Don’t fall into this TRAP! Your first deal will be the hardest deal you make, not the easiest. Let’s face it, you don’t know what’s coming, you still don’t know how hard you have to push yourself, you don’t know the numbers involved, whether “no” really means “no”, whether private lenders will really hand over your cash for your deal, you don’t know the nature of it. everyone in the business and how to deal with them. Above all, you don’t know if it will be worth it if you give it everything you have. Overcoming all these unknowns makes the first deal the hardest; in fact, it’s what kills 98% of those who try it. The time it takes depends on many things, it can take a month, it can take a year. In the meantime, keep your job.
3) Underestimating the effort required:
In essence, putting together profitable businesses is quite simple, and can be easy, once you know how to do it. But on your first deal you don’t have the benefit of experience, everything is new and you have to pay retail for every advance you make. If you’re still under the spell of the refreshing aid you drank at the seminar, the first thing you’ll realize is that the offers aren’t out there somewhere waiting for you to pick them up, they need to be detected and then created. Sellers hide the truth about your property, brokers give you pro forma numbers and make it difficult to access, lenders want miles of paperwork, closing agents can be wonderfully selfish and ‘forget’ to tell you important things. If you can be objective about all of this (and not take it personally) you’ll realize that nobody cares to make things easy for you. In fact, everyone is looking to you to create value for them. The deal happens or falls apart as you step into the role of ring leader and take responsibility for making sure it all happens. It takes a lot of effort the first time, and “your best” has to come through.
4) Not using the tools you have:
Not all real estate careers are hype. In fact, there are many high-quality, licensed courses available, usually through your local REIA, that give you the tools and guidance you need to succeed. When you buy a great course that passes on the author’s hard-earned tools and lessons, there’s a tendency to slack off. This is a trap, and avoid it like the plague. You’ve worked hard and invested your hard-earned money sorting through the dross to find some authoritative instruction. Take advantage of your good fortune and act immediately. Real estate investing tools are incredibly powerful. Direct response marketing for lead generation, positioning, developing the lead pipeline, negotiating, creating more demand for yourself than the supply, understanding the “after” are all tools and processes that will change your business. life and the way other people see it. You need to familiarize yourself with them and master them as soon as possible.
5) Playing the skeptical victim:
Real estate investing gurus like to showcase the elements of making deals that make the public gawk. Things like buying without your own money, or selling the property before I buy it! The thing about these sizzling points is that they are all true. Only after gaining a bit of experience does he realize that doing these things is the most effective way of doing business. Yes, you might feel manipulated by the marketing hype, but it’s a trap to think of yourself as a victim because of it. First, because if you let cheap skepticism shield you from “risk,” you’ll never learn how the business works. There IS unlimited money available to finance your offers. You CAN close deals before you buy them, this is how a simultaneous close works. You CAN buy a 100 unit apartment building without investing a dollar of your own money… it’s simply the most effective way to buy income property. Second, if you see yourself as a victim, you’ll never get your first deal. You need to take full control of your efforts and push yourself as hard as it takes to get your first deal done. See yourself as the center that makes everything happen. You are the one who makes the difference.
6) Not taking full responsibility for your success:
Take careful note of the internal dialogue that goes on in your head. If there is any kind of self-pity, rationalization is a sign that you haven’t taken full responsibility yet. Another sign is that you are always looking for shortcuts. Unfortunately, there are no shortcuts in real estate. You may have prior business experience that speeds up your learning curve, but in the end you won’t receive the money you’re looking for until you create value for all players in a real estate transaction.
Learning the game, the rules, the strategy, the mindset, takes time. You’ll know you’ve taken responsibility for your success in real estate when you: a) view your current job as an asset, not only for generating income but also as an opportunity for personal development. b) when you are thinking of taking a full year to thoroughly educate yourself and put everything you learn into practice. You can buy a property before the year is up, but there is no pressure. This is your learning phase. c) you start to be a serious student. You focus on one type of real estate and stop being a connoisseur of real estate courses and seminars. You do the best you can with what you have at any given time. that is, try as hard as you can. 90% of “smart” is working. And be very selective with whom you listen. There is nothing as valuable as good information on a specialized topic. Gives unique leverage. The opposite is also true.
Many of us jump into real estate investing out of fear. Marketing experts tell us that we must act now or we will miss the opportunity. Well, real estate will always be around, and no matter what phase of the market you are in, there will always be an opportunity to make a lot of money.
However, we need to be adults about it and take our education and investment seriously. Keep your job and meet your immediate financial needs and those of your family first, then begin your exciting journey to real estate wealth.
