Being a new real estate investor is uncomfortable and challenging. You knowreal estate has many benefits, otherwise, you would have never started in the first place. But the reality of getting your investment property empire off the ground may not be as easy as the stories you hear from others.
Unlike hearing popular success storiessecond hand, you get to experience all of the internal and external obstaclesfirst hand. The anxiety, self-doubt, and confusion of doing something new are hard to translate (or even remember) for more experienced investors.
So in this article, Ive reached back into my own experiences as a new investor. And Ive also thought about the experiences of new investors Ive coached. Then I identified 5 stubborn obstacles that can derail new investors from their real estate goals.
But the point of what youre about to read isnt all doom and gloom. Instead, my goal is to help you become more aware of the obstacles so that you can prepare yourself mentally and emotionally to overcome them.
Michael Jordan was arguably the best basketball player ever. When the game was on the line, he wanted to ball because he knew he could win the game for his team. You could see the confidence in his face.
But how did he become confident? Was he born with it?
Jordan did have talent. But his confidence to hit the game-winning shot came from thousands and thousands ofpractice shots.He knew he could hit the shot because had prepared ahead of time.
As a new real estate investor, you can do the same thing.
Ive found that your preparation as a new investor should focus on three primary areas:
Entrepreneurship is essentially a game of ideas. So educating yourself is always a primary, necessary step to build confidence.
First of all, you should educate yourself about your local real estate market. You can begin with myGuide to Pick the Ideal Location For Investment Properties.
Second, learn about strategies and tactics that have worked for others. Ive sharedthe 15 best real estate investing strategies. And I have many articles on real estate investing tactics, includinganalyzing your market,finding good deals,running the numbers,seller financing,negotiation techniques, and more.
Real estate is a capital intensive business. This means you need money to buy or control it. But as I found out as a new investor with only $1,000 in the bank, you dont needYOURmoney. You can leverage the money of others.
So, build confidence by learninghow to use debt intelligently and safely. Study alternative financing techniques likeseller financing,self-direct retirement accounts, andlease options.
Then go out and ask your lenders, partners, or other sources of financing if they will put up the money. Knowing you have access to money is a critical source of real estate investing confidence.
Its possible to borrow confidence from others. After all, we humans are social creatures. Its how weve survived as a species for hundreds of thousands of years.
As a new real estate investor, be sure to focus onbuilding a teamof confident, experienced, and competent individuals. Their knowledge and skills can compensate for your own deficit of confidence.
If there was one excuse I hear from new investors more than any other, it would be lack of time. They know what to do but they just dont have the time to do it.
First of all, I certainly can empathize. Were all busy. In my own life, I struggle to balance the different priorities that all seem important to me.
But on the other hand, I also know that were all given the same 24 hours in a day. Like investing money, we allchooseto spend our time on certain things. So, wise use of time basically comes down to our daily choices.
To improve those daily choices, Id started by learning to differentiate betweenthe urgent and importantthings in your life. Too often people are busy, but theyre not productive on what really matters.
Then work on batching the activities of your day into distinct 1-2 hour periods. The practice of batching takes advantage ofthe 80:20 principle and Parkinsons Law, which are foundational principles of personal productivity.
Little by little, you can regain control of your time. And then you can use that time and your energy on important goals like real estate investing.
When I first began investing in real estate, I went to a LOT of seminars. As I talked about in Obstacle 1, I knew that education was a key tool to becoming more confident.
But one of the downsides of those seminars was an introduction to the Cookie Cutter Syndrome. This meant that many of the educators were guru-types who knew it all and tried to persuade me and everyone watching that their cookie cutter strategy or technique was the best.
For example, they may show how to usea lease option techniqueto buy properties with little money down and less risk.
And for just $2,999 I could learn all their lease options secrets and become as amazing as they are!
Aside from my disgust at using intimidation as a persuasion tactic, these gurus also missed the point of cookie cutters. Cookie cutters arent for everyone. And forcing people into rigid molds ends in frustration and painful lessons.
Instead, cookie cutter techniques are simply tools in a toolbox. You educate yourself how to use these tools, and then pull them out when you need them to build your real estate investing portfolio.
If youre a new investor struggling with overwhelm because there are so many interesting angles in real estate, I recommend going through the process in my articleReal Estate Investing For Beginners How to Find Your Focus.
Theory is reading and understanding the concepts in a book (or a blog post!). But reality is applying what you learn in the real world.
This is a tough obstacle that we all face when we do something new. As hard we teachers try, we cant do it for you!
First, embrace the idea of imperfection. When you were a baby learning to walk, you fellhundredsof times. If you had been a perfectionist back then, you would have quit long before you took your first step!
As a new real estate investor, youre going to be imperfect. Youre going to stumble through your first several dozen attempts torun the numbers of a deal. Youre going to stutter and not know what to say when negotiating with a seller or real estate agent. And you might even do like me and purchasea loser rental property!
Its ok. We all make mistakes, and no one begins perfectly. Merging theory and reality is a process of continuous failures until you finally get it.
Second, just take baby steps. You can avoid fatal mistakes as a new investor if you dont try to do too much, too fast.
If youve never done a deal before, just do ONE deal. Then pause and learn from it.
If youve never made an offer on a property, just make ONE offer. Then pause and learn from it.
Toddlers walkpainfullyslow while learning. And new real estate investors move slowly too.
Its all part of the learning process. Just accept it and embrace it!
Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan Press On has solved and will always solve the problems of the human race.
Sometimes we just quit too soon. Lack of persistence and determination can be your final obstacle as a new investor.
Rolando and Jenn from Cincinnati, Ohiobought their first propertyafter viewing over 40 properties that did not work.
Bianca DiValerio from Chicago, Illinoislost everything financially and then bounced back again.
Anthony Petz in Bellingham, Washingtonalmost gave up before finding real estate success and quitting his job.
I could go on and on with the stories of how new investors had to persist.
But the main question is will you persist when the inevitable obstacles come?
Im not talking about unintelligent stubbornness. Persistence includes intelligently pivoting and changing when you experience short-term failures.
But you just cant quit too early. It takes time to learn, build confidence, and gain enough momentum to succeed with real estate investing.
The slogan Press On will solve many of your problems as a new investor.
You now know five of the primary obstacles experienced by new real estate investors. I hope these ideas will help you prepare and overcome the obstacles you face in your own journey.
But as you know, you will likely face your own unique challenges both inside your head and in your local market. How you respond and learn from these obstacles will become your own unique success story in the end!
What obstacles have you faced as a new investor? And whats your plan to overcome them? Id love to hear from you in the comments below.
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My son, Jordan, was named after MJ (a LOT of boys were named Jordan in the 90s). And I *love* that Calvin Coolidge quote. Its probably in my top 5. Persistence and hard work gives you a tremendous advantage over most people (even more than money).
So cool on your son Jordans name! MJ was certainly at the center of the sports/entertainment universe in those years. I remember well! And I agree on the Coolidge quote. So, inspiring.
I guess my greatest obstacke is f in ndi g a good deal, I have 2 rentals that are doing good that I purchase in the last 18 months and have the down payment and the finance to buy 2 more, have been running the numbers at least 3 properties per day in the area that I try to concentrate my investments but cant find anything that is worth the ivestment
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