Investing in real estate is much more difficult than it appears from the outside. In addition to increased competition, there are also many obstacles for new investors to overcome. Fear, lack of experience and minimal real estate education are just a few of the issues that make breaking into the business a daunting task for even the most motivated individuals. Compounding these issues is the fact that while you can find help, you are going through these obstacles mostly by yourself. That said, becoming an investor is difficult but certainly not impossible. If you really want to get started, you need to address the issues that will stand in your way. Increase your real estate knowledge to avoid making the mistakes made by others.
The number one thing that will stand in your way is fear. Fear in dealing with more educated buyers and sellers. Fear that you will lose money and the respect of your family and peers. Fear that you do not know what you are doing and will quickly be exposed. Most people are afraid of change and will fight desperately to keep things familiar. If you are changing careers and you want to be successful, you need to leave your fears at the door. Like most other businesses, real estate investing takes months and often years to learn and eventually master. There will be days that you are less successful than others and moments that can jeopardize your business, but these are valuable learning experiences. If you are afraid of what you know, what you are doing and who you are talking to you will never make it in this business. It is not easy, but you need to conquer these fears if you are going to move forward.
Fear of experience and education can be lumped into one major hurdle. The world of investing, and finance in general, is filled with jargon and lingo that is not known by everyone. There are numerous terms related to every step in the process from making an offer to rehabbing to eventually closing. While you should have some knowledge on these, you don’t need to know every term. Instead of pretending like you know what you are talking about, don’t be afraid to ask questions or find out the answers. If you wait until you know everything, you may be waiting a very long time
As far as experience, you have to start somewhere. It may not be a bad idea in the beginning to work with a mentor or to lean on a more seasoned investor when you are just starting out. Much has been made about the real estate collapse and many stories of investors losing everything. The reality is that if you stuck to good investments, in good areas and didn’t pull equity out, you probably survived the storm and are still in the business. For every one deal that can be a problem, there are nine others that you will make money on. Even experienced investors get involved in deals they will regret. If you really want to be in real estate, you need to jump in with both feet and test the water. If you wait for the perfect deal, you will be waiting a long time.
There will always be obstacles for new investors. These obstacles are often in our own heads and can be managed with the right frame of mind and outlook. Never let these stand in the way of pursuing a new deal or getting started in the business.