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Dealing With The Highs & Lows Of Real Estate Investing

Written by Than Merrill

As a real estate investor, you will have days that leave you wondering why you ever got started in this particular industry. Conversely, there will be days in which deals seemingly fall into your lap. There is perhaps no other business where the highs and lows dominate every day. The highs of realizing a profit on a deal and celebrating the spoils of your success can be displaced in an instance when you lose a deal at closing. Things won’t always go smoothly, but the longer you stay focused on your vision, the greater chance you have of weathering the storm.  Perhaps even more importantly, maintaining a level head through the highs and lows of real estate investing can give you a significant advantage over those who collapse under pressure.

How you react to tough situations will tell investors a lot about their work ethic and character. It can feel like a punch to the stomach when you lose a deal or your property is not selling for as much as you would like. Instead of getting down and doing less, use the situation as motivation to strive for me. Find out what you did or are doing that is causing any problems and begin to accept that not every deal will be as easy as you would like. Between issues with buyers, delays with contractors, problems with marketing and market fluctuations, it takes a lot to successfully close a deal. There are landmines everywhere. Once you acknowledge the pitfalls of investing and accept them, the better off you will be.

As an investor, it is important to remember to maintain a level head. Do not let the highs and lows influence your daily actions. Things may be working for you now, but they can change in an instant. The minute you think you have things figured out or they will last forever is when you will start to get in trouble. Your pipeline may be full, but leads will eventually close or fall out. When that happens, you need to have new deals to replace them. If you are basking in the glory of a few closings, you will go months before finding the next one. Do not become complacent in the face of success or adversity.

Nothing can get you behind the eight ball quicker than spending money before a deal actually closes. With the way the mortgage and real estate market is currently, there is no such thing as a sure deal or an easy closing. The deal may appear to be easy enough, but a few items on title or a buyer getting suddenly laid off can quickly change that. Take each deal individually and see it through to closing before you spend any profits. Instead of looking at each deal take a step back and look at the big picture. There will be deals that you lose at the 11th hour, but there will also be deals you gain seemingly out of nowhere.

Real estate investing can burn you out if you let the highs and lows get to you. Accept that there will be ups and downs and that they are part of the business. Once you acknowledge this, it will help you in your day to day routine. Again, do not let the ups and downs of real estate investing force you to become complacent. Maintain a level head and you will be able to run a successful business.