It has been said that we are greatly influenced by the people around us. Friends, family and co-workers all shape our opinions on various topics. The real estate market is an industry that opens the door to a wide variety of opinions and discussions. Everyone seems to have an opinion, or knows someone that does. It is important to remember, however, that opinions are just that: opinions. If you listen to them enough, they can start to manifest in a truly negative way. Here are some negative comments you may have come across, and the way they should be handled:
1.) “All the good deals are gone in this market.”
There will always be good real estate deals – regardless of the market. Different strategies work better in different places, but the same principals apply. The foreclosure and short sale boom supplied many investors with a jumpstart in the business. The truth is that this is just one of many ways to find good deals. Between probate sales, tax liens auctions and distressed sellers, there are many ways to generate leads. Investors have been investing long before 2008, and will continue to do so long after. It may take more work to find deals, but they are there. You need to stay up on market trends and changes to get new leads. Deals will always be there if you are willing to find them.
2.) “I would love to invest, but I work full time.”
There is truly no easier time to invest than right now. This doesn’t mean the business is easy, but there are many ways to get work done. A large majority of new investors work out of their house. Current technology has made it easier than ever to research properties and conduct business. Instead of wasting an hour on your favorite website, you can spend time researching a new deal. If you have a good realtor, attorney and contractor, you are well on your way. Working full time is no excuse not to begin investing.
3.) “I don’t have money to invest.”
A popular myth from those outside the business is that you need money to get started. Having access to capital is a plus, but it is far from a necessity. If you can find good deals, you will find money. All you really need to get started is a passion to learn the business. The more you know, the easier it will be for you to find deals. Once you have deals, you can find friends, family or hard money lenders to fund them. Getting hard money for deals is not as difficult as it once was. In most cases, you will have multiple options to choose from. Using other people’s money when you are just starting out is a great way to learn the business and build contacts while still making money. With a little digging, you will be surprised at how easy it is to find money for your business.
4.) “Real estate is far too risky.”
There is risk in all forms of investing. There is no such thing as a risk free investment. The term investment implies an inherent risk. This is certainly the case with real estate. There are many stories abound from investors who got burned on bad deals. What they don’t tell you is that they spent no time researching the property and didn’t know what they were getting into. If you know the property and everything about it, your risk is reduced substantially. You never know which way the market will go but there are clues to help guide you. Instead of jumping at the first attractive deal that comes your way, take your time and do your homework. This will lead to higher profits and a much lower chance at losing money.
5.) “There is too much competition out there.”
There are more than enough deals to go around. Most of your competition lies with attractive deals that everyone wants. Of course these will be the ones in demand. If this is your market, you need to change how you find deals. Look for alternative methods that are outside the box. Mobile homes, tax liens, probate and commercial buildings can all be markets that are largely untapped. How you go about finding deals may need to change as well. Instead of marketing to the same people everyone else is, be one of the few looking at a specific niche. There are still many distressed sales and good investment deals out there. They just wont fall into your lap.
6.) “I’m waiting for the market to shift.”
Trying to time the market can be a frustrating and fruitless practice. It is almost impossible trying to buy on the floor and sell at the ceiling. Every market you invest in will hold some type of advantage. You can either buy on the low side and wait for a seller’s market or buy higher and see increased demand. The point is that there are deals in any market, but you need to take action. Waiting for the market is just an excuse to say that you aren’t ready to get stated.
Negative comments around you will lead to one of two actions: using it as motivation to prove them wrong or letting it influence how you invest. There will always be negative people and comments about the business. That doesn’t mean you have to listen to them.