While bad deals are certainly part of the game, they are usually the exception rather than the norm. The important thing is to learn from them. Once you are involved in a deal that does not go as you planned, it is only natural to think about it on every subsequent deal. Minding due diligence and knowing exactly what you are getting into is important, but at some point you need to trust your judgment and make a decision. If you constantly wait around for the perfect deal, you may be waiting a very long time. Indecision can cripple a real estate business. Conduct research to the best of your ability and have faith in the data you collected. Move forward only when the numbers suggest it.
As an investor, there is a very fine line between knowing your numbers and letting them control your decisions. The numbers should be your ultimate decision maker on every deal, but only if you are looking at the right ones. Most deals have a time consideration that needs to be met. Therefore, it is important to know what numbers to look at and quickly process that information. After you run your numbers and go over your findings, it is time to make your decision. The numbers are not going to change. If you don’t have conviction to make an offer at this point, you should probably move onto another property. If you do like what you see, there is no need to talk yourself out of making an offer. You did your homework; now it is time to put that into action.
There are plenty of horror stories from investors who may have lost money on a deal, have horrible tenants or miscalculated rehab costs. Just because this happened to someone else doesn’t mean it will happen to you. There are often extenuating circumstances with every deal and you truly don’t know the whole story. If you look at the absolute worst case scenario in every deal, you will never buy anything. Driving your car to work could potentially be dangerous, but that doesn’t mean you aren’t going to do it. There is risk associated with every deal, you just need to know what you are getting into before you do it.
Once you know the risks, you can weigh them versus the reward. If the reward is worth the risk, you should go for it. Not every deal that carries some risk is bad. On the flip side, not every profitable deal is a good one, especially if it takes up too much of your time. Looking at the worst case can be a good exercise for new investors, but if you worry too much about this you will only make offers on a few deals a year.
Between items posted on the internet, investment club meetings and networking groups, there are plenty of opinions to sift through. There is nothing wrong with listening to everything, but you shouldn’t form an opinion based on another business. There are many reasons why something may or may not have worked for a fellow investor. They could be in a different market, have different numbers, run the deal differently or have different expectations. You can’t let someone else influence you to the point that you never entertain a deal that someone else wouldn’t. You have your own business and goals for each deal. Your portfolio will never be the same as someone else’s. Everybody has an opinion on the real estate market; this doesn’t mean that they are right.
The best way to get over indecisiveness is to be as organized as possible with your numbers. It is also a good idea to have a checklist for each property and each new deal. If you have a bottom line for what you expect and what you want out of every deal, you can quickly sift through new properties. Instead of scrambling around when presented with a new property, you can lean on your checklist, expectations and goals. If you are happy with the property and the figures, you should have enough information to make a decision. Trusting your work and your numbers may take some time, but once you complete a successful deal you will want to do it again and again.
There will always be people that will tell you that you can or shouldn’t do something a certain way. One of the best things about being an investor is that you can run your business anyway you please. Between wholesaling, flipping and renting, you have many options available to you. Taking that first step without knowing exactly how the process will end can be nerve wracking, but it is part of the business. If you waver back and forth on every deal, you will constantly watch good deals go to other investors. At some point in every investor’s career, they need to take the plunge and get over any indecision. If you can make decisive moves on properties you want, you will find yourself with many more deals over the course of the year.