If real estate investing was easy, everyone would do it. While the business appears easy from the outside, most people inside the business will tell you a different story. Investors that may appear to be an overnight success usually took years to get to where they are. You may stumble across a lucky deal every now and then, but for the most part, investing is far from easy. You need to work hard every day to put yourself in a position to be successful. The minute you think about giving up, there are a dozen new investors looking to take your place. There are many reasons why new investors leave the business, but there are even more reasons to stay. The following represents some common problems new investors face, and solutions to each:
1. “I thought things would happen much faster”
The real estate business is filled with opportunity. However, much like any other business you start, it takes time to establish yourself. If you opened a restaurant or a barber shop, you wouldn’t expect your first year to be an overwhelming success. What is often overlooked is how much work is required to be a success. 18 hour days should be the norm, and not the exception. The harder you work, the quicker you can accelerate your learning curve and start to see the results you are looking for. Results in real estate can happen quickly, but you need to be willing to put the work in.
2. “I really don’t know what I am doing”
There is always some level of uncertainty in any new business. You can have all the education you need, but at some point you need to take action. Action is the single biggest learning tool you will have. Instead of having a fear of failure, you need to fight through and learn. Even deals that don’t end up closing will serve as a valuable learning tool. Additionally, there are many ways to learn the business and people you can turn to. Local networking groups and real estate investment groups offer a source of information. Successful investors started out in the same boat as you not fully knowing the business. Don’t be afraid to reach out to them if you need help.
3. “I don’t have enough time to invest”
Are you maximizing all of the hours in your day? Many investors get started in the business investing part time, while keeping their full-time employment. There is nothing wrong with this. With all of today’s technology, it is easier than ever to invest wherever you are. If time is an issue, look at how you spend your day. Instead of spending time on your favorite website, start looking for deals. You can also skip your favorite TV show once a week or sacrifice an occasional night out. If you really want to be an investor, you should be willing to make some sacrifices. Between lunches, nights and weekends you should have more than enough time to work on the business. Your time may be stretched thin, but you will reap the benefits.
4. “There just aren’t any deals in my area”
There are deals in every area if you know where to look. There may not be easy deals, but they are there. There is more than one way to invest in real estate. Everyone is currently caught up looking for the next quick rehab, short sale or foreclosure. Instead of being part of the investing herd, look at alternative ways to find deals. Go on Craigslist and other real estate sites for rental properties and see if they are interested in selling. Call “for sale by owner” signs you see in front yards. There are many ways to get deals that you probably haven’t tried yet. There are always deals if you are willing to find them.
5. “I don’t want to lose money investing”
There is risk on almost every deal you get involved in. Some risks will be much smaller than others, but the risk is still there. The key to handling risk is knowing what you are getting into. If you know the worst case scenario on every deal, it will be easier to deal with. It is also important to know that with risk there is also reward. You don’t need to take foolish risks that aren’t worth the returns, but a lot has to happen for you to lose money. You would need to completely overlook a major item with the property or miss the mark on the property.
Failing on one deal is not a sign that you should stop what you are doing. This is the learning curve that should be an expected part of the business. Almost every investor, on almost every deal, has the thought of getting out and starting over. These are natural thoughts. What separates them is that they fight through and come out better for it. The first year in the business will go a long way in determining if there will be a second, third or fourth year. Keep your expectations in check and work as hard as possible. The real estate business is certainly not easy, but it can be the most fulfilling career out there. If you can fight through the difficult times, there will be years of successful investing ahead.
